I paid $139 for a Kindle Fire, which does a whole lot of stuff for a whole lot of cheap. If Microsoft is not playing in that price neighborhood, they will not succeed.
Some people will pay a premium for an iPad, because and iPad is the standard, and they feel the price is worth it. These people have so much money that parting with an extra $400 bucks doesn’t matter.
But for everybody else, it’s all about price, price, price. Once you overcome the barrier of functionality, people will pick the cheaper option. Right now, it’s Kindle Fire at $139.
I doubt it will be priced anywhere near that, it actually has good guts and a larger device. It has to beat the 10” varieties out there in price, that’s all.