Microsoft should focus on functionality with Surface, not price

Microsoft finally unveiled pricing of its highly anticipated line of Windows Surface RT devices, which appear to be aimed squarely at the iPad: The entry-level, 32 GB Surface will sport a $499 price tag but won’t include the Touch Cover keyboard pad that Microsoft is marketing as a kind of hallmark for its tablets. The same tablet packaged with the cover will sell for $599, while a high-end, 64 GB Surface will be sold with the cover for $699.

Tech bloggers and analysts generally don’t seem impressed with Microsoft’s pricing strategy, calling it too high at the entry levelflat-out crazy and surprisingly high.

But I don’t entirely agree. In fact, I think Microsoft may have been foolish to match the price of the entry-level iPad in the first place with a tablet that doesn’t feature the keyboard that will differentiate it. Instead of competing directly with the iPad, Microsoft has a chance here to position its tablets as devices that bridge the gap between tablets and laptops rather than as the complementary device that the iPad is. That strategy might have swayed a lot of consumers who’ve resisted buying an iPad because they know they’ll still need the functionality of a laptop. It will be very interesting to see how the company markets its keyboard-less tablet.