Microsoft’s Surface pricing is flat-out crazy

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Microsoft partners reportedly in despair as Surface tablet launch nears
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Microsoft partners reportedly in despair as Surface tablet launch nears

I was pretty bullish about Microsoft’s (MSFT) line of Surface tablets until I learned what they’d actually cost. Now, I understand that some people think that  Windows RT Surface is worth $500 because it provides 32GB of storage with an expansion slot, it comes preloaded with Microsoft Office 2013 and it will have an operating system that provides more desktop functionality than iOS or Android. In other words, users are getting a tablet that can replicate many core PC functions for the same price as a 16GB iPad. What this argument overlooks, however, is this: The $500 Windows RT Surface doesn’t come with the Touch Cover keyboard pad that is essential for using the device as a work machine.

Really, let’s think about this for a second: The appeal of the Surface is that it’s a tablet that you can also use for work. That’s why it comes with the added storage and Office in the first place, so that busy professionals can bring it with them wherever they go and work on their spreadsheets, Word documents and Power Point presentations on a super-portable little device that can click into a custom-made keyboard.

Oh, wait. What was that about clicking into a custom-made keyboard being a major part of the Surface’s appeal? Because for $500, you won’t get that keyboard even though you’ll be getting all the other goodies designed to help you work on the Surface. No, to get that keyboard you’ll have to pay an extra $100 just so you can use your tablet as it was designed to be used.

You may think I’m being harsh here. You may point out that Microsoft has an entirely different business model than Amazon (AMZN) and Google (GOOG) and that it makes no sense for the company to break even or take losses on its first major tablet just to drive up user adoption. But this is missing the big picture, which is that Microsoft desperately needs to make a splash in a high-end tablet market that has been thoroughly dominated by Apple (AAPL) for the past two years, especially if the company is really intent on relying less on OEMs and building more of its own devices in the future.

If you’re still having trouble understanding, take off your geek hat and stop thinking about technical specifications and preloaded software. Instead, think like the average consumer whom Microsoft is trying to reach with its Surface ad campaigns and consider how you’d react when trying to choose between two high-end $500 tablets. What’s more, consider how the two companies’ recent histories have affected consumer trust in each brand.

On the one hand you have the gold standard for tablets, the product whose name has become ubiquitous with 10-inch tablets much the same way that the iPod became ubiquitous with portable digital music players. Many of your friends already have it and they’ve been raving about it nonstop. You’ve tried it out yourself and you love not only the feel of the device but also the huge variety of apps you can get for it on the iTunes store.

On the other hand, you have a tablet from Microsoft. You’re intrigued because it’s the first tablet you’ve seen that will let you get real work done. But you’re annoyed that for $500 it doesn’t come with the cool click-in keyboard that you’ve seen in commercials. And then you remember that it’s developed by Microsoft, the same company that has tormented you over the past several years with PCs that take five minutes to boot up, that require constant restarts for software installations and that come preloaded with all kinds of bloatware from OEMs. And then you think, “Wait, why was I considering paying $500 for a Surface again?”

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