A rumour coming down the wire from Engadget today puts the Microsoft Surface tablet not at the nearly $1000 price point that earlier rumours suggested, but rather in the Kindle Fire and Nexus 7 neighbourhood of $199.

Engadget claims the rumour came from an unnamed conference attendee at Microsoft’s TechReady15 conference, where all the details of the Surface’s launch were allegedly laid out.

While this price point would make sense in order to make the device competitive against existing tablets, not all analysts are convinced that this rumour is realistic.

“We do not believe that Microsoft will price Surface at $199, but rather that it would be priced in a similar range with the iPad (around $500),” Rick Sherlund of Nomura Equity Research wrote in a note Wednesday. “The report suggests that Microsoft would potentially price its announced Surface device at $199; this is well below the BOM of probably $300 and would, we think, undermine its OEM partners and thus we firmly believe this will not be the case. Microsoft has previously stated it will price Surface to be competitive with comparable devices.”

Given that some OEMs have taken a hostile approach with Microsoft over the Surface, it is unlikely that Microsoft will want to further chill the relationship it has with them.