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MS badly needs to make a dent in the market. Moving to mobile devices is as huge a paradigm shift as the introduction of the IBM PC. Apple couldn't match prices since they didn't have the production experience of IBM and the Asian clones that followed.
The move to iPhone, iPad and later Android and Galaxy Tabs etc means that if MS wants to be part of the future and not a legacy maker of software they have to step up to the plate and hit a home run (didn't think a European could come up with that metaphor, did you?) and in order to do that they will have to undercut the price for both iPads and Galaxy Tabs with their Surface with at least $100 on a device with similar specs. I doubt they will do that at the initial stage, but then they will find few buyers. Those who already own similar device will not be lured over, and they hold a powerful position in the market. Almost all my friends, that aren't that interested in gadgets, come to me asking for advice on what to buy and why they should select a certain device.
Few will recommend a device they haven't used for a certain time span, so if price isn't appealing the word of mouth marketing on social media will be severely limited.
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