The optional Touch Cover is one key differentiating hardware feature of the Surface, IHS said. The Touch Cover is essentially a cover that also acts like a full-function keyboard, but uses only capacitive touch sensing to operate. According to IHS, the keyboard works very well and even has a touchpad at the bottom, making the device feel and operate very much like a notebook PC when the Surface sits on its kickstand and the Touch Cover is laid flat.
"The Touch Cover represents a best-of-both-worlds approach for the Surface, giving it the most attractive features of both notebook PCs and media tablets," Rassweiler said. He said the Touch Cover also differentiates the Surface from the iPad.
The Touch Cover is as an example of a feature that can encourage users to upgrade to a higher-end model that generates more profits for a company, Rassweiler said.
According to preliminary estimates by IHS, theTouch Cover costs Microsoft $16 to $18 per unit. The Touch Cover accessory integrates a printed circuit board assembly with numerous chips, including a Freescale microcontroller and an Atmel touchscreen controller, IHS said.
Samsung is the biggest design winner in the Surface, according to the IHS teardown. Various divisions of Samsung supply components or complete subsystems for many of the most expensive portions of the individual tablet dissected by the IHS, including the display, the NAND flash and the battery pack, IHS said. Most of the Samsung parts are available from multiple sources, and other suppliers are likely utilized in other individual Surface tablets, IHS said.
Another major winner is Nvidia Corp., which supplies the Surface's processor, IHS said. The Surface RT is based on an Nvidia quad-core Tegra 3 processor, which uses the ARM architecture and costs an estimated $21.50, accounting for 8 percent of the Surface RT's BOM, IHS said.
At the current prices. No it wont. If they priced at kindle/nexus7 levels, then maybe. The only adv of surface is that it has MS Office. However MS is releasing an iOS version of office soon. So no reason to buy surface over ipad.
Significantly the lower cost probably comes from a sub-par display that has rather low resolution for its size. My 4.8" phone has a 1280 x 720 display, almost the same resolution as Microsoft's 10" display. And no comparison to the iPad3...