Industry sources asserted that Microsoft’s Surface tablet will initially be offered only in WiFi version, even though analysts opine that its lack of cellular connectivity won’t be seen as a major limitation.

What could, however, likely be perceived as problematic is the Surface’s asking prices, allegedly set at $599. This would put the WiFi-only Surface just thirty bucks shy of Apple’s 16GB 4G iPad 3…

Bloomberg has the story:

Wi-Fi-only models are the larger part of the market right now and Microsoft’s decision may enable it to keep costs down, said Ben Bajarin, an analyst at technology consulting firm Creative Strategies.

Still, it could curtail the company’s efforts to promote Surface as a device you can use anywhere and in any way, Bajarin said.

As for the rumored $599 price target (if The Next Web is to be believed), it’s in stark contrast to Steve Ballmer’s reassurance at Monday’s Surface unveiling, when he said the device will “be priced like comparable tablets”.

In another move that could confuse would-be buyers, Microsoft said it will offer a high-end version of the Surface alongside an ARM-based version. This beefed up Surface will run Windows 8 Pro and Intel’s chips for backwards compatibility with legacy Windows software.

That device should be priced in the neighborhood of Ultrabooks, Ballmer said.

Sorry about the video (courtesy of Read Write Web), I couldn’t help myself.

Two things here.

First, Microsoft will likely down the road offer a cellular version of the Surface, but clearly it would be far more prudent to have both WiFi and cellular flavors on offer from day one.

And second, regarding price, Microsoft obviously wants to reap the margins on this thing. They could give up margins and offer the Surface at a lower price, perhaps even at a break-even price.

That, however, would seriously undermine OEMs who wouldn’t be able to price-match the Surface because of the royalties paid to – wait for it – Microsoft for using Windows 8 on their tablet products.

PC makers reportedly hinted at feelings of “betrayal” over the Microsoft tablet, though some like Acer think it’s just a ploy to drive Windows 8 adoption.

Looks like Microsoft is playing a dangerous game here, no?