Here's How Much the Microsoft Surface Will Cost (Update 1)

Updated from 9:21 a.m. EST to provide official pricing from Microsoft in the second paragraph.

NEW YORK (TheStreet) -- Microsoft (MSFT) has "accidentally" announced how much its Surface RT tablet will cost, according to a published media report. The pricing could prove that CEO Steve Ballmer was right when he said the device will be "competitive" with other tablets. (By which he meant Apple's (AAPL) iPad).

TechCrunch posted pricing screen shots of the ARM (ARMH) processor-based tablet. Without a Touch Cover, the 32 GB version will set you back $499, according to the technology Web site. If you want the cover, it's an additional $100. The largest Surface RT tablet (64 GB) will cost $699 with the cover. The 64 GB new iPad costs $699 as well. (Update: Microsoft has posted the prices after all on its website, exactly as leaked before.).

It's quite possible that this "accident" was no accident at all, and was done to gauge users' interest at those price points, given they are comparable to the iPad. Raymond James analyst Michael Turits wrote that Microsoft can make inroads with the ARM-based tablet, noting that Apple uses its own proprietary ARM-based chips within the iPad.

"On the one hand, the Windows RT (ARM) version gets Microsoft into the ballpark with a tablet of the right dimensions and weight to compete with the Apple iPad," wrote Turits in a June research report. He rates Microsoft shares "outperform" with a $34 price target. "Compared to the iPad (WiFi) at 9.5"x7.3", 9.4 mm thick, and 652 grams, the Windows RT Surface has a 10.6" display (16x9 aspect ratio), and is 9.3 mm thick and weighs 676 grams."

In addition to chips built around ARM Holdings' (ARMH) design, there will also be a Surface tablet that uses chips from Intel (INTC). Pricing details for the Intel-based Surface, however, have not yet emerged.

At these levels, Microsoft is reportedly confident that it can sell a lot of Surface tablets for the holiday season. The Wall Street Journal noted that Microsoft's Asian suppliers have received orders for between 3 million and 5 million units for the fourth quarter. Apple reportedly expects to sell 10 million units of the yet-to-be-launched iPad Mini during the all-important holiday season.

The Microsoft Surface will officially launch Oct. 26. Apple is set to unveil its iPad Mini on Oct. 23, just three days prior to this.

Interested in more on Microsoft? See TheStreet Ratings' report card for this stock.

--Written by Chris Ciaccia in New York

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