Mind that the Surface tablets are smaller, lighter, thinner, and use pricey casing material like magnesium that is more expensive to use than plastic or aluminum.

Even low end ATOM based PC Tablets go higher as examples like the fairly recently updated release for Gigabyte’s S1081, previous was S1080 with N570, with N2800 Cedar Trail goes for around $650 but is not using any expensive designs like proprietary magnesium casing.

However, that brings up the point that the MS Surface tablets are most likely primarily targeted towards MS business users. Such premium build quality is typical only for either ruggedized systems or systems specifically targeted to the business users market like say the Lenovo Thinkpads for example.

The Windows RT model may be using lower cost ARM solution but even ARM tablets can be pricey as the latest Asus Transformer Infinity shows, but mind the Surface build quality, while having only a 1366×768 resolution, is still overall higher than the Asus premium offering.

All of which is before considering the value of the OS. While it will take time for Windows RT to develop a proper app ecosystem, it’s still a more capable desktop OS versus the mobile OS solutions we’re presently stuck with on most tablets.

Also MS is including MS Office and Student 2013 RT with the Windows RT release and that saves users over $100 versus having to buy it separately. Though of course not everyone would use it but again the point that this is mainly targeted to business users and that’s still where MS makes most of its profits and makes sense they want to counter the spread of alternative OS tablets in those markets.

After all Apple at the very least has been making some significant inroads towards being adopted by many companies and that’s not good news for MS and would be a trend they’ll want to resist.

All that said though, it depends also how serious MS is towards pushing their own brand tablets as the move may be in part to give the industry a much needed wake up call.

Mind many system makers have lacked innovation, keep moving towards more and more cost cutting that lowers build quality, and dilute the experience with things like bloatware.

So consider the fact that the Surface tablets will be clean installs of Windows without all the usual junk and you won’t need to worry about how fragile the device will be.

Meanwhile, other system makers will still come out with their own products. Especially to cover the ranges the MS Surface doesn’t cover like pretty much the entire mid-range offerings and lower end performance markets.

Microsoft assessed the situation and realized that its partners were going to price Windows tablets above their Ultrabook pricing. afterall, when a product category is new, higher average prices is justified relative to the current line up of Ultrabooks and laptops. HP, Acer and others probably do not want a Windows tablet canibalizing sales of its $399-$799 PCs, so yhey probably resereved the $700+ price points for an equally servicable Windows tablet. They would justify the price as it relates to their own family of PCs, but not necessarily good to get mass proliferation of the Windows 8 monile platform. Acer also has interest in their Android tablets and, like others, will not set out to cut their margins on a new Windows platform for tablets.

I think Microsoft has made a bold move and the right one. they will force their partners to accellerate their Windows tablet development and evolve their ultrabook pricing even more. Uktrabooks, sleek and sexy like Macbook Airs, are still not trending well, which spells doom and gloom for Windows in the consumer space. Microsoft is heading things off at the curve before Apple takes a majority share of the personal computing segment like they did with PMPs. the Surface is NOT an iPad comoetitor. It is a Windows platform for long term Microsoft relevancy.