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Office on Surface Pro suggests a shift in Microsoft's sales strategy

Gregg Keizer | May 31, 2013
Surface Pro tablets to be sold in Japan will come with fully-licensed copy of Office Home & Business 2013

Adding Office Home & Business 2013 would also reinforce Microsoft's implied contention that the Surface Pro is for work, said Miller. And it would be a concession that the Surface Pro's $899-$999 price can't compete in the consumer space.

The Japanese price for the 128GB Surface Pro is close enough to the U.S. price, said Miller, that if Microsoft does pre-load Office in America, it will probably maintain the current cost. "You'd get Office included for the same price," Miller said.

According to a Microsoft price sheet, the pre-tax price of the 128GB Surface Pro in Japan is 95,048 yen, or about $944, just $45 more than in the U.S.

Gottheil and Miller both said that if Microsoft does pull the trigger on bundling Office Home & Business 2013, it would almost certainly extend a deal of some sort to its OEM (original equipment manufacturer) partners for their Windows 8 tablets.

"They won't do this to hurt OEMs, so maybe Microsoft will define a set of products that compete head-to-head with the Surface Pro, and make those OEMs the same deal, or a price cut on Office," said Gottheil.

"I would expect some kind of similar pricing to OEMs," said Miller, "or Microsoft risks more conflict with OEMs."

Microsoft's relationships with its partners has been rockier in the past year, kick started last June when the Redmond, Wash. developer surprised everyone—OEMs included—by unveiling its Surface line, the first-ever computing hardware designed in-house. The lackluster performance of Windows 8 and Windows RT has further strained those relationships, with several long-time partners dissing the latter and Dell, the world's third-largest computer maker, blaming Windows 8 for some of its financial woes.

Japan's Surface Pro configurations—128GB and 256GB, with the current 64GB model missing—may also signal that Microsoft will kill off the 64GB Surface Pro in all markets. That entry-level model has come under fire because the storage space available to users is a relatively meager 28GB.

The Japanese offering, however, may not herald a shift, cautioned Gottheil. "Microsoft may simply be experimenting with ways for a broader distribution of the Surface Pro," he said of the bundling.

And other problems surface—no pun intended—with the inclusion of Office Home & Business 2013, Miller added. "If they're branding the Pro as the business [system], what exactly is the Surface RT for?" he asked.


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