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Microsoft Makes Surface Tablet Price Cuts Permanent

Microsoft Makes Surface Tablet Price Cuts Permanent
By Barry Levine

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There are signs that the price-cutting strategy for Microsoft Surface tablets, which also includes big discounts to schools and educational conferences. is having some effect. Earlier this week, ad network AdDuplex reported that usage of Microsoft's Surface RT and Surface Pro tablets had improved since its last report in April.
 


That sound you heard in early August was the price of Microsoft's Surface Pro dropping by a hundred dollars. Now, the technology giant has decided to make the price cut permanent, as well as offer price cuts for accessories and bundles.

The price cut, which had been expected to end Friday, affects all Surface Pro models. The 64 GB model, for instance, now sells for $799, and the 128 GB for $899. Touch Covers are now $40 less, making them $79, and the Limited-Edition Cover is $89. There is no price change for the $129.99 Type Cover. The Type Cover offers actual physical keys on its keyboard, compared with the pressure-sensitive ones in the Touch Cover.

The Surface RT, whose price had been cut $150, will stay at its price of $349 for the 32GB model and $449 for the 64GB. Surface RT bundles with the Touch Cover will be offered for another $50. There are no bundle discounts for the Surface Pro.

'Exciting to See'

In a statement to news media, Microsoft said the "customer response to recent Surface pricing and keyboard-cover promotions has been exciting to see." It added that customers "who buy Surface love Surface, and we're eager for more people to get their hands on this incredible device." The company has said the new prices will roll out to markets worldwide through a "phased approach."

Two factors are attributed to the price cut being made permanent. First, sales of the Surface tablet line have been disappointing. In July, the company revealed that both tablets in the product line had brought in only $853 million from their launch in October of last year to June. That was less than the $900 million write-down Microsoft took for unsold Surface RT tablets.

The second factor is that Microsoft wants to move existing inventory, to make room for the next generation of its tablets. A new Surface RT model, with a Qualcomm Snapdragon 800 System-on-a-Chip and RT 8.1, is expected to be released by the end of this year. Additionally, there have been reports that a next-generation Surface Pro is in the works, using an Intel Haswell processor and featuring better battery life.

Cuts Were 'Inevitable'

There are signs that the price-cutting strategy, which also includes big discounts to schools and educational conferences. is having some effect. Earlier this week, ad network AdDuplex reported that usage of the Surface RT tablet had improved since its last report in April.

The RT's usage grew from 6.2 percent to 9.5 percent of the ad network's total in that period. Similarly, the Surface Pro went from 23rd most-used Windows 8 device in the April stats to the seventh. AdDuplex's numbers favor the tile-based interface that is the only interface in the RT and an optional one in the Pro, so the overall picture might be skewed, but there are also anecdotal reports of increased purchases following the discounts.

Laura DiDio, an analyst with Information Technology Intelligence Consulting, said making the price cuts permanent was "inevitable." In fact, she added, "if I were Microsoft, I'd be cutting them even more," plus offering "rolling promotions by region."
 

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Steve:

Posted: 2013-09-03 @ 12:47pm PT
Still overpriced.



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