Watch out, iPad? Microsoft Surface tablet to cost $499

It looks like Microsoft won’t be trying to drastically undercut the iPad with its own tablet.

Microsoft is pricing its self-made Windows 8 tablet, the Microsoft Surface, starting at $499 for the base model.

A Surface tablet with an attachable keyboard-cover combination, one of the hallmark features of the Surface, will cost about an extra $100 at $599, while a model with more storage and a cover-keyboard will cost $699.

That puts it more in line with the pricing of Apple’s iPad, where the base model costs $499 for a 16-gigabyte iPad. It’s still more expensive than the iPad 2, Apple’s last-generation tablet, which costs $399.

Running Windows 8, the Microsoft Surface is a big jump into a market that’s growing more crowded by the day. There are now a number of 7-inch tablets that cost around $200, and a smaller iPad is reportedly on the way that should also be around that price.

And the Surface is still more expensive than Amazon’s new, larger Kindle Fire tablets. The base-level model for Amazon’s 8.9-inch tablet costs $299.

But Microsoft is clearly confident in the tablet, given that it has placed orders to produce 3 million to 5 million of these tablets in the fourth quarter.

Read more on Microsoft's Surface tablet at the Wall Street Journal.