Feeds

Analyst says Surface could hurt Ultrabook, Windows 8 tablets

MSFT subsidies could mean US$499 Surface price and death for Android tablets

The essential guide to IT transformation

Taiwanese analyst outfit Trendforce thinks Microsoft’s forthcoming Surface devices will cannibalise the market for ultrabooks, put price pressure on Android tablets and confuse consumers.

The analysts’ WitsView service recently published a note in which research director Eric Chiou says that Surface devices’ 32GB of storage is a higher spec than that on most ten-inch Android tablets, justifying a higher price of US$599.

At that price Chiou feels Surface will “inevitably cannibalize ultrabook sales” and goes on to say that “Microsoft may not be pleased to see a competition between its own products.” Consumers may also be confused by the overlapping prices.

One way out, Chiou suggests, is for Microsoft to dip into its colossal trove of cash and subsidise Surfaces so they emerge to US$499, a ploy he says the company has done before when it took XBOX to market. The results of that subsidy program speak for themselves, as XBOX is now the number one console. A US$499 price would also slot surface in nicely between the iPad and ultrabooks.

Such subsidies could be bad news for Android tablet players, with Chiou offering the following scenario:

Surface may stand out in the market by sacrificing profits or getting subsidies from Microsoft, while the remaining brands are unlikely to possess the ability and will to do so. Undoubtedly, customers are expected to take the price of Surface as a benchmark for every single prospective Windows 8 tablets; that is, Microsoft’s Surface with an intentionally lowered price may decrease the price flexibility that affects its brand partners’ earning capacity, and even further impact their desire to launch new products.

That’s not all good news for Microsoft, as fewer or less-happy tablet-makers also means fewer potential Windows 8 tablet manufacturers.

WitsView nonetheless predicts that of the 94 million tablets it expects to be sold in 2012, four million will run Windows 8.

That’s decent uptake, however, as the new devices are tipped to emerge on October 26th. If we work on crude averages alone, without accounting for sales spikes pre-Christmas, four million Windows 8 slabs in sixty-odd days will represent at least 15% of tablets sold in the most-frenzied months of the selling cycle. ®

Boost IT visibility and business value

More from The Register

next story
So, Apple won't sell cheap kit? Prepare the iOS garden wall WRECKING BALL
It can throw the low cost race if it looks to the cloud
Apple's iWatch? They cannae do it ... they don't have the POWER
Analyst predicts fanbois will have to wait until next year
AMD unveils 'single purpose' graphics card for PC gamers and NO ONE else
Chip maker claims the Radeon R9 285 is 'best in its class'
Barnes & Noble: Swallow a Samsung Nook tablet, please ... pretty please
Novelslab finally on sale with ($199 - $20) price tag
Apple to build WORLD'S BIGGEST iStore in Dubai
It's not the size of your shiny-shiny...
Just in case? Unverified 'supersize me' iPhone 6 pics in sneak leak peek
Is bigger necessarily better for the fruity firm's flagship phone?
Steve Jobs had BETTER BALLS than Atari, says Apple mouse designer
Xerox? Pff, not even in the same league as His Jobsiness
prev story

Whitepapers

Implementing global e-invoicing with guaranteed legal certainty
Explaining the role local tax compliance plays in successful supply chain management and e-business and how leading global brands are addressing this.
5 things you didn’t know about cloud backup
IT departments are embracing cloud backup, but there’s a lot you need to know before choosing a service provider. Learn all the critical things you need to know.
Why and how to choose the right cloud vendor
The benefits of cloud-based storage in your processes. Eliminate onsite, disk-based backup and archiving in favor of cloud-based data protection.
Top 8 considerations to enable and simplify mobility
In this whitepaper learn how to successfully add mobile capabilities simply and cost effectively.
High Performance for All
While HPC is not new, it has traditionally been seen as a specialist area – is it now geared up to meet more mainstream requirements?