Microsoft has finally revealed pricing for Surface with Windows 8 Pro and the response from potential customers and OEMs is likely to be disappointment.
The 64 GB version will run $899 and the 128 GB version will cost $999. Those prices don't include the Touch Cover or Type Cover but they do include a Surface pen.
While Microsoft is trying to pitch this Surface as somewhere between a laptop and a tablet, most potential buyers are sure to compare the Surface with Windows 8 Pro against the iPad. And that will make the price hard to swallow.
By comparison, the 64 GB iPad is $699.
Microsoft has been hoping to get consumers to buy the Surface, in the same way they buy the iPad, and then bring it to work. The Surface with Windows 8 Pro is definitely more appealing as a device to use at work than the original Surface RT, which doesn't run full versions of Office or Outlook. But consumers will need a reason to pay more for the Surface with Windows 8 Pro than an iPad and it's not clear that people know what that reason is.
Up against laptops or convertibles, the new Surface is a slightly better deal, which is sure to annoy OEMs that are already annoyed that Microsoft has gotten into the hardware business.
Adding the $119 or $129 keyboard to the Surface with Windows 8 Pro puts it just below the price of some of the more hyped convertibles. The Lenovo Ideapad Yoga runs for $1099, for instance.
Microsoft itself seems uncertain whether to position it against tablets or laptops. So it's taken a middle ground.
In a blog post announcing the pricing, Panos Panay, general manager of Microsoft Surface wrote: "Surface with Windows 8 Pro will run your current Windows 7 desktop applications – it's a full PC AND a tablet."
Trying to define a new category -- including by throwing in a pen -- is going to be a tough sell in a market so dominated by the iPad.
We'll have to wait until January, when the Surface with Windows 8 Pro goes on sale -- just missing the holiday shopping season -- to see if Microsoft's positioning works.