Josh Lowensohn/CNET

If you had hoped for truth behind the rumors that Microsoft's tablet would sport a sub-$200 price tag, Steve Ballmer has dashed those hopes.

Microsoft CEO's has been pretty outspoken about how his company was going use its new Surface tablet to turn up the heat on Apple, but he's been pretty tight-lipped about how much it expects its Surface to cost -- until now. Noting that "we haven't announced pricing," Ballmer, Seattle Times during an interview, did give a better idea what the company has in mind for a target price.

"If you look at the bulk of the PC market, it would run between, say, probably $300 to about $700 or $800," he told the newspaper. "That's the sweet spot."

While that hints at a tablet priced around $500, Ballmer criticized less-expensive devices as being less capable.

I think most people would tell you that the iPad is not a superexpensive device. ... [When] people offer cheaper, they do less. 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. It doesn't mean you might not read a book on it....

The Surface, which is due to be released October 29, has been rumored to have a starting price of $199, eliciting a mixed response from Microsoft manufacturing partners already worried that the software giant was unfairly encroaching on its turf.

Acer Chairman JT Wang has expressed concern that a low-priced Surface tablet could steal business from Acer's own tablets. Lenovo CEO Yang Yuanqing said he believes his company can build a better Windows 8 tablet than can Microsoft.

Ballmer also noted that the company is switching gears to take on Apple, moving away from its reputation as primarily a software maker.

"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," he said.