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Microsoft Drops Surface Pro Tablet Price

Microsoft chops $100 off the price of its Surface Pro. Is it just a case of too little, too late?

Microsoft Sunday dropped the price on its Surface Pro tablets to $799 for the 64-GB model and $899 for the 128-GB models. The deal is only good until Aug. 29 and does not include Microsoft's detachable $120 Touch Cover keyboard.

"Surface Pro is essentially a keyboard-less laptop," said Larry Velez, CTO and founder of Sinu, a New York-based MSP that partners with Google and Microsoft. "Microsoft hasn't priced the Surface Pro to compete."

[Related: Microsoft CEO Ballmer Fesses Up, Admits To Overestimating Surface Demand ]

Velez said that even with the price reductions, the Surface Pro isn't competing with tablets, but rather with sub-$1,000 Windows 8 convertible notebooks or MacBook Air models priced at around $1,000. "Either way, it's priced too high," he said.

"Microsoft is way behind the rest of the tablet market," said Allen Falcon, CEO of Cumulus Global, a Westboro, Mass.-based Google partner. "The channel wants tablets, but Surface just isn't part of the conversation."

Falcon said Microsoft "blew it" with Surface RT and Surface Pro by creating confusion around the capabilities between RT and Pro and that the price drop is too little, too late.

Microsoft's Surface Pro price reduction follows dismal sales figures reported in the company's annual 10-K report to the U.S. Securities and Exchange Commission in July, where it revealed the two tablet models brought in revenue of $853 million. Market-research firms estimated Microsoft only sold 900,000 Surface devices in the first quarter of 2013. By comparison, Apple sold 14.6 million iPads during the first quarter of 2013.

Last month Microsoft cut prices on its Surface RT(32-GB) tablet to $350 from $500. The RT model that included the Touch Keyboard was dropped to $450 from $600. The 64-GB Surface RT model (sans a keyboard) dropped to $450 from $550.

"Microsoft is trying real hard," Velez said. "It took them a decade to win the battle with Xbox. I hope they learned from this first version," he said.

PUBLISHED AUGUST 5, 2013

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