Apple to go Head-to-Head with Microsoft - 128 GB iPad vs. Surface Pro

By Tony Rizzo January 29, 2013

Apple has announced that it will now include a 128 GB 4th-Generation iPad in its lineup. The starting price will be $799 for the Wi-Fi model and $929 for the model with LTE support. All else with the 4th-gen machine remains the same as far as we know.

There is no hint that a “special Apple-designed” keyboard will appear (although it wouldn’t take much for Apple to deliver one).

A keyboard from Apple for the iPad? Yes. The big deal here of course is that Apple is now looking to compete head on with – or perhaps simply looking to pre-empt and block Microsoft’s Surface Pro from gaining any traction when it launches.

The Surface Pro is targeted specifically at the enterprise, and it would hardly be incorrect to suggest Apple is in fact making an overt enterprise move here.

Can it be anything else? We remember Tim Cook, during Apple’s Q3 2012 earnings call, making jokes about the Surface RT as being ill-conceived. We attributed that comment more to competitiveness than anything real, and with the 128 GB iPad targeting the enterprise, it’s pretty clear Apple doesn’t really believe the Surface is ill-conceived, whether it’s the consumer-focused RT or the enterprise- and prosumer-focused Pro.

In fact, it is clear that Apple considers the Surface Pro a real threat.

Apple has never overtly catered to the enterprise with its iPads – enterprises simply use them without Apple having had to do any enterprise marketing or sweating any enterprise use. That is about to change with the Surface Pro – which we believe will prove a powerful enterprise tablet. The Surface Pro, which will run the full Windows 8 OS, will be in stores on February 9, priced at $899 for the 64 GB model.

A 128-GB Surface Pro will also be available soon thereafter, which might come in at least $100 above that if not more, putting it into the $1,000 range.

Microsoft Must Get Aggressive!

Microsoft royally screwed up its RT launch by limiting its availability to Microsoft stores – and even today, having added Best Buy, Staples and others, that screw up continues to haunt sales. Microsoft needs to think outside the box here and look to pre-empt Apple’s attempt at a pre-empt.

How so? Simple – by looking at the Surface Pro as a means to seed the tablet market for Windows 8, rather than looking at it as a source of revenue – at least up front. When Microsoft launches the Pro we want to see Ballmer say, at the end of his presentation, “Oh, one more thing…the Surface Pro will ship with 128 GB and will be priced at an introductory $699, and for $759 we will provide the full touch keyboard.”

That’s all it will take for Microsoft to bring some real marketing power to the game.

It’ll will be quite difficult for Apple to compete on price – it is not it its DNA to do so, and the Surface Pro is good enough to compete with the iPad through such incentives.

Apple peppered its press release on the 128 GB iPad with numerous references to the enterprise, including quoting some large businesses. Microsoft needs to aggressively respond when it launches, and price is the one absolutely clear issue here it can create a significant “wedge issue” for enterprises to think strongly about.

Now is not the time to worry about Surface Pro margins; now is the time to worry about Surface Pro market share.

Do it Microsoft!

Edited by Braden Becker

TechZone360 Senior Editor

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