The 64GB iPad is $699 vs. $899 for the Surface Pro. That's not double. I'd say that's entirely in the same market. In my opinion the Surface Pro is better value since it is a full PC.
The cheapest version of a device gets people in the door. Many people will, rightly or wrongly, compare the $499 iPad 4 with the $899 Surface Pro. That one has 16 GB of space and the other has 64 GB (well more like 48 GB since Windows and Office take a lot of space) comes into play after people are thinking the iPad is way cheaper than the Surface Pro.
