Microsoft Surface Tablet’s $199 Price Tag is a Double Edged Sword!

News has started surfacing (pun unintended) that Microsoft Surface RTM tablets will cost around $199. Engadget reported that Microsoft’s Windows RT tablet will be competitively priced at $199. The pricing sounds very competitive (Google’s Nexus 7 also is priced at $199) but it also will end up being a double edged sword.

Will Microsoft feed on its OEMs?

Microsoft will start selling Windows 8 in October, it is a big deal for the company to remain relevant as a brand. The tablet if priced at $199 will be highly subsidised.

With Windows store available for users to buy apps from, Microsoft might make the money back from it, even from a subsidised product. But that subsidy will not be available for the likes of Samsung, Acer and Dell, who are the OEMs that might be working on a Windows tablet.

The OEM’s will simply not be able to compete with a $199 tablet from Microsoft and the effect could be they might simply drop plans for a Windows tablet. A open-sourced and free Android will sound a lot more sweeter for manufacturers.

The Damage is Already Done!

The damage to Microsoft’s Surface tablet might have already been done. The fact is the price of $199 is not confirmed but the rumour has really spread.

The company has also not exactly denied the price tag and that might be damaging the Surface tablet a lot more. It means if they eventually price is higher than $199, it might disappoint a lot of buyers who were expecting a lesser priced device.

All is not lost for Microsoft

That said, if the Surface tablet is a big hit, then Microsoft might really have opened a new revenue stream for themselves. The OEM’s will hate it but PC makers do not really have much choice as far as operating systems go and would probably end up staying with Windows for new couple of years atleast.

What are your views on Microsoft getting into the tablet space? Do drop in your comments.

Update: The post is about news that Surface tablet could be priced at $199. Later Microsoft confirmed the pricing at $499 for Surface Tablets.