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Microsoft Going 'All Out' With Surface Launch; Orders 3 Million Units


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Microsoft may be betting a huge pot that their new Surface tablet will be a big hit. According to a recent report from IDC analyst, Bob O'Donnell, the Redmond company has supposedly ordered 3 Million units of the new tablet that is designed to take on the iPad. This ame analyst also had some comments to make regarding some of the recent rumors surrounding the tab.

First, Mr. O'Donnell does not believe the rumor that Microsoft will only sell their Surface tablet in their Microsoft Stores. He expects them to sell in the regular retail chain as well. Second, he also does not believe the current rumor that Microsoft will be selling the tablet for $200. He pointed out that selling the Surface exclusively in Microsoft Stores would make it impossible for the company to sell the 3 Million units it has ordered. Additionally, he points out that the $199.99 rumored price makes no sense, because that price would make it impossible for any of Microsoft's OEM partners to sell a competitive product. He also points out that because the Surface is a PC product, a subscription based pricing with the talbet subsidized down to the $200 price would not make sense either. Here's a quote with a few more details,

“They do have a video store and music store. Theoretically they could give you a Netflix type or Pandora type deal with free access to music and video,” he said. “But remember what happened to Netbooks and 3G, where you had to pay a monthly fee? That was a disaster. It took off initially but then nosedived. The point is, people catch on and say wait and minute, when I do the math on this monthly thing I’m paying way more than I want to.”

The analyst also believes that because Microsoft is mainly looking to sell the software, not the hardware, the company won’t be so quick to screw over its partners.

“Let’s say there are four competitors. In a fair world the price is about the same and they each sell 25 percent. But at $199 Microsoft sells 100 percent and everyone else sells almost zero,” O’Donnell explained. “They (Microsoft) have a truly symbiotic relationship with [PC makers]. If you undercut their prices then all of those licenses you would have sold through [PC makers] don’t get sold.”

Source: BGR
This seems pretty reasonable to me. While it would be great if they offered a way to get the tablet subsidized to $199 for those not wanting an up front cost I see this being much closer to the reality of the situation.