Has Amazon Just Backed Microsoft And The Surface RT Into A $199 Corner?

Jeff Bezos,and the Kindle Fire HD Family (Image credit: AFP/Getty Images via @daylife)

Well that was all rather aggressive. I?m going to talk about Amazon?s pricing strategy on the new Kindle tablets over the weekend (hit the follow button at the top of this post to make sure you don?t miss that one), but I wanted to point out one thing tonight.

Amazon has the Kindle Fire HD 7 inch tablet at $199, and a 8.9 inch variant at $299. Google have the Nexus 7 tablet at $199. We?re waiting to see what Apple will do with the mythical iPad Mini at 7 inches, but a starting price for a 16GB model at $299 would not be out of place.

Where will Microsoft place their Surface RT tablets in the pricing scale for their expected release at the end of October?

I?ve already argued that their failure to lock down a price and the resulting media speculation around the price has pushed Microsoft into no-win territory. Now Amazon has come out and said that their $199 unit is being sold pretty much at cost, and they?ll make money on the media sales. That means Jeff Bezos is banking on a large volume of sales, and to get that they?ve brought the price right down.

If Microsoft want the Surface RT to be a bona-fide hit, they?ll need that same volume. And if they want it, then they?ll need to pay for it.

The only saving grace is the hot-rod that is the (deep breath) Amazon Kindle Fire HD 4G LTE. It?s priced at $499. If Microsoft can get the pitch right and show their Surface RT tablet is at that same sort of technological level, perhaps they can go higher on the price? but half way through the product launches of September, the expectation has been set. A consumer friendly tablet is around two to three hundred dollars depending on screen size.

Are Microsoft as hungry as Amazon? As Google? Or do they need to keep the price high so their manufacturing partners will still be able to turn a profit with their Windows 8 devices?

Source: http://www.forbes.com/sites/ewanspence/2012/09/06/has-amazon-just-backed-microsoft-and-the-surface-rt-into-a-199-corner/

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