Microsoft chief executive officer Steve Ballmer has suggested that the Windows 8 Surface tablet will be priced closer to the iPad than cheaper Amazon Kindle Fire end of the tablet market.

Steve Ballmer: Microsoft Offers the Best of Both Worlds in Windows 8

The computer giant is yet to announce a price for the upcoming Surface tablet, which is expected to go on sale along with the all-new Windows 8 operating system at the end of October.

In an interview with the Seattle Times, Ballmer said, when asked about the Surface's price: "I think most people would tell you that the iPad is not a super-expensive device [starting from £399 in the UK]...when people offer [a tablet that is] cheaper, they do less."

Ballmer added, talking about tablets cheaper than the iPad: "They look less good, they're chintzier, they're cheaper. If you say to somebody, would you use one of the seven inch tablets, would somebody ever use a Kindle [Fire, £129] to do their homework?

"The answer is no; you never would. It's just not a good enough product. It doesn't mean you might not read a book on it...If you look at the bulk of the PC market, it would run between, say, probably $300 to about $700 or $800. That's the sweet spot."

The coming months are hugely important for Microsoft, and will see major updates across most of its product lines. Windows 8 is said to be the most important update since Windows 95, while Office, Windows Server and Windows Phone are all seeing updates soon.

A devices-and-services company

Looking forward, the outspoken Microsoft boss said that in a world of more mobile computing and mobile form factors - such as the range of convertible laptop/tablet hybrids we saw announced at IFA - it is "going to be hard to tell what's a tablet and what is a PC."

The company will soon launch Windows Phone 8, which was most recently shown off by Nokia while announcing its new Lumia 920 and 820 phones. "We've got a big challenge in front of us," Ballmer said.

"We're a small player [in the smartphone market], but we have a different point of view in terms of user experience. We've got great cloud integration with the rest of the Microsoft world, which a lot of people participate in."

Ballmer said in the interview that Microsoft was born as a software company, but added: "I think when you look forward, our core capability will be software, but you'll probably think of us more as a devices-and-services company. Which is a little different.

"Software powers devices and software powers these cloud services, but it's a different form of delivery."