"The mere existence of Surface made those [tablet partners] mad, so a $199 price would probably cause some heads to explode," Mainelli said.

Jack Gold, an analyst at J. Gold Associates, said he'd be "amazed" if the $199 price is correct. "That said, Microsoft could certainly sell a lot of them at that price, effectively seeding the market and gaining market share quickly, which would be good for the ecosystem of developers," Gold added.

But Gold agreed that $199 would undercut Microsoft's OEMs. "I'd think Microsoft would leave it to their OEMs to fight the low-cost price wars with Amazon and others, rather than doing it themselves," he said. "I don't think Microsoft would be good at it."

Matt Hamblen covers mobile and wireless, smartphones and other handhelds, and wireless networking for Computerworld. Follow Matt on Twitter at or subscribe to . His email address is .

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