Taken from MarketNews

Microsoft announced that it would be releasing the Surface Pro hybrid tablet PC to the U.S. market in January at a starting price of $899 for the 64GB model. The price was expected to be considerably higher than the current Surface RT that came out in October, but is it too much for it to have a chance of success?

Considering that we’re talking about a full-fledged Windows 8 PC that shouldn’t have any major limitations for the user, maybe it’s not such a bad deal. On the other hand, once you go to 128GB and add the touch keyboard cover, you’re looking at a price tag in excess of $1,200. Some will say that a MacBook Air costs about the same and has similar specs, which is indeed true.

The Surface Pro is also a tablet, first and foremost, and adding the Touch Cover essentially turns it into a functioning PC. With access to Microsoft Office and an array of other Windows apps, isn’t this the best of both worlds? You have what appears to be an ideal combination of creation and consumption, particularly since the Surface Pro would ostensibly be able to run apps from both the Windows Marketplace and those downloaded from a Web browser.

This is precisely what some of Microsoft’s partners are attempting already. The Surface Pro is actually a tad late to this party. The types of hybrid PCs coming to market from HP, Dell, Lenovo and others right now are similar in their basic concept. You have a clamshell form factor like any other laptop, but then you pull off the screen’s half of the unit, and you then have a tablet.

This concept has been tried before with little success. Lenovo had first proposed such an idea a few years ago, but to be fair, it was dragged down both by Windows 7 and a market that wasn’t quite ready for such a product. Windows 7 wasn’t tablet-friendly, and so any tablet made to work on that operating system was already doomed to failure. Surface Pro and others like it are different because the software meant for them.

In that sense, Surface Pro has a realistic chance. Where it may go wrong is in its design. I’ve noticed it myself when using a Surface RT. Propped up on a table or desk, the lightweight, slim and stylish form factor looks great, and isn’t hard to manage or type on, thanks to the impressive Touch Cover keyboard. However, once I tried to emulate that same experience on my lap, it didn’t work. The kickstand design on the back wasn’t meant to be resting on a person’s legs, which is why it’s not only a little uncomfortable, but also terribly non-ergonomic.

This is where it has the potential to alienate customers. Being a hybrid tablet PC, Surface Pro should be a pleasure to use in almost any working scenario. There’s an implication in the product marketing that using this on the couch only requires the tablet half. What about the user who wants to lean back on a couch or recliner chair and do some word processing? They wouldn’t get too far unless they were sitting at a desk or table.

The problem for Microsoft is all of this is lost to a consumer who is fixated on the price. At over $1,200 after taxes for a 128GB model with a Touch Cover, it would seem that the premium being paid is precisely for that full hybrid experience. But what if you don’t get the Touch Cover? Then it’s US$999 for the 128GB model alone. Sure, that’s double the storage capacity of the iPad, and in this case, Microsoft has also packed in a full desktop OS, not a mobile one. Except Microsoft then has to explain how an OS that is easily 15-20GB in size makes sense for a device with lower internal storage at such a high price point. After that, they then would have to sell consumers on the idea of buying a copy of Office, which won’t be included.

All that said, it’s unlikely Microsoft is aiming for every type of consumer out there. This is definitely a niche product, and it will almost surely be undercut by the company’s own OEM partners. It’s premature to suggest that the Surface Pro will be dead on arrival, as some pundits online have said, but it’s equally hard to see how it will be a really successful product.

Of course, it could do far better than anyone expected and forever change the concept of what a Windows tablet PC is. If consumers buy into that, then the bigger story won’t be how well the Surface Pro sold, but rather how it changed their conceptual view of what a Windows computer is supposed to be.