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Microsoft boss Ballmer hints at £400 - £500 pricing for Surface tablet

With iPhone 5 mania squarely behind us, tech eyes are now shifting to the impending launch of Windows 8 and the accompanying Microsoft-produced Surface tablet.

Ahead of what he described as the “biggest thing” in the company’s history since the launch of Windows 95, Microsoft CEO Steve Ballmer spoke to the Seattle Times about Surface pricing, the importance of Windows 8, and the firm’s future shift from being primarily a software company to being a “devices-and-services” company.

The price of the Surface tablet, which will come in two flavours, has been hinted at over the past few months, with guesstimates ranging from $199 (£120) to up to £1,300. Though Ballmer did not offer any confirmation, he suggested it could fall somewhere in the middle. “If you look at the bulk of the PC market, it would run between, say, probably $300 (£185) to about $700 or $800 (£430 or £490). That's the sweet spot.”

Whereas budget devices like the Kindle Fire and Nexus 7 are considerably more affordable with pricepoints beginning from £129 and £159 respectively, cheaper devices “do less,” the Microsoft boss said. “They look less good, they're chintzier, they're cheaper.”

“If you say to somebody, would you use one of the 7-inch tablets, would somebody ever use a Kindle to do their homework? The answer is no; you never would. It's just not a good enough product,” he added.

The device will go on sale on 26 October, in tandem with the arrival of Windows 8, which Ballmer said is sure to “do great.”

“There's going to be close to 400 million PCs sold in the next year, which makes it a big market. And whether it's 405 [million] or 395 [million], it's a big market, and Windows 8 will propel that volume,” he said.

The launch will also mark the company’s transition from being a purely software vendor to being, more broadly, a hardware company and service provider. When asked his vision for Microsoft five or ten years down the road, Ballmer said he envisioned it being a “pre-eminent technology company.”

“I think when you look forward, our core capability will be software, [but] you'll probably think of us more as a devices-and-services company. Which is a little different. Software powers devices and software powers these cloud services, but it's a different form of delivery,” Ballmer said.

“[It] doesn't mean we have to make every device. I don't want you to leap to that conclusion. We'll have partners who make devices with our software in it and our services built in. We're going to be a leader at that,” he said.