Microsoft Surface Price Strategy to Compete with iPad: A Comprehensive Analysis
As the tech industry continues to evolve, Microsoft's Surface lineup faces increasing competition from Apple's iPad. To effectively compete in the market, Microsoft must carefully consider its pricing strategy. This article will delve into the price points that the Microsoft Surface would need to sell at in order to garner a fair chance at gaining market share against the iPad, exploring key factors such as price, features, and consumer behavior.
The Current Price Points of Microsoft Surface and iPad
Microsoft and Apple have established distinct price points for their respective tablets. For the 32GB Surface for Windows RT with a keyboard, the retail price is $499, while the 64GB Surface for Windows Pro with a keyboard costs $948. In contrast, the iPad offers a 16GB model starting at $499. These prices present an interesting juxtaposition, with the Surface including Office, whereas the iPad does not have this pre-installed feature.
Strategic Pricing Considerations
To effectively compete with the iPad, Microsoft must ensure that its Surface devices are priced competitively without compromising quality and exclusivity. The following points outline the key considerations:
Price Alignment with iPad
While it may be tempting to lower prices to meet or even undercut the iPad, this strategy can be risky. Microsoft needs to maintain a certain level of exclusivity by setting higher price points. This will help differentiate the Surface from the iPad in terms of quality, features, and user experience. Pricing the Surface below the iPad would not fulfill this role and may lead to a race to the bottom, where competition becomes overwhelming, and profits are eroded.
Incorporating Value Propositions
The Surface includes pre-installed Microsoft Office, a significant feature that provides additional value to consumers. This pre-installed software sets the Surface apart from the iPad, which does not come with this feature. Therefore, Microsoft should leverage this advantage by positioning the Surface as a more comprehensive and feature-rich option. By emphasizing these value propositions, Microsoft can justify the higher price point to consumers who prioritize the full suite of Microsoft Office applications.
Market Competition Against Other OEMs
Other Original Equipment Manufacturers (OEMs) will likely offer tablets in the 399-449 range with subsidies, leveraging pre-installed apps in their pricing strategy. To maintain a competitive edge, Microsoft should focus on creating a clean, uncluttered version of the Surface that directly competes with the iPad. This clean version will offers a superior user experience and may entice consumers who prefer a more straightforward and polished end product. By maintaining clean pricing, Microsoft can target a broader audience and differentiate itself in the crowded market.
Conclusion: A Balanced Pricing Strategy
Microsoft's strategy for competing with the iPad must prioritize a balanced approach in pricing. By not selling below the iPad's price point, Microsoft can effectively maintain its market position and differentiate its products based on value and features. The Surface, with its pre-installed Office and superior user experience, offers significant advantages that can justify a higher price point. This strategy aligns with Microsoft's vision for offering high-quality, feature-rich devices that meet the needs of business professionals and power users.