Microsoft Cuts Surface Tablet Prices Amid Weak Demand

Microsoft Corp. (MSFT) is cutting the price of its Surface RT tablet by as much as 30 percent as the device struggles to lure customers amid competition from machines such as Apple Inc. (AAPL)’s iPad.

The least-expensive Surface RT model costs $349 without a cover that doubles as a keyboard, according to Microsoft’s website, down from $499. The same machine with a keyboard included is being reduced to $449 from $599. Microsoft is discounting a version with double the memory to $449 without a keyboard cover, or $549 with the attachment.

Surface, Microsoft’s first-ever computer, has been largely shunned by consumers and corporate customers since its debut in October, selling just 900,000 units in each of its first two quarters on the market, according to researcher IDC. Chief Executive Officer Steve Ballmer is pushing into hardware to bolster sales as demand for Windows software ebbs amid a global personal-computer slump.

Ballmer unveiled a sweeping revamp last week which is intended to streamline management and rev up growth in areas like tablets and mobile computing. Tablets, a market where 3.7 percent of machines run Microsoft’s Windows, are poised to outsell PCs by 2015, according to IDC.

Photographer: Ramin Talaie/Bloomberg

A Microsoft Corp. Surface tablet sits inside the company's store during its grand opening in New York. Close

A Microsoft Corp. Surface tablet sits inside the company's store during its grand opening in New York.

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Photographer: Ramin Talaie/Bloomberg

A Microsoft Corp. Surface tablet sits inside the company's store during its grand opening in New York.

Frank Shaw, a spokesman for Redmond, Washington-based Microsoft, declined to comment on the price cuts. On its website, the company billed the discounts as “a great tablet, now at an even better price.”

To contact the reporter on this story: Lisa Rapaport in New York at lrapaport1@bloomberg.net

To contact the editor responsible for this story: Pui-Wing Tam at ptam13@bloomberg.net

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