Wednesday, August 7, 2013

Microsoft adjusts the prices for Surface tablets

A lot has been said about the pricing of the Microsoft Surface tablets. Here's my view:

Microsoft introduced the Surface RT at $500 (well, $499) and the Surface Pro at $1000 (okay, $999).

In June, Microsoft announced a promotion: a free keyboard with the purchase of a Surface RT. The keyboard normally sold for $100, so June saw a discount of $100.

In July, Microsoft dropped the price of the Surface RT by $150 -- and cancelled the promotion for the free keyboard. In effect, Microsoft dropped the price by an additional $50. (For some reason, lots of the media claimed that this was "slashing the price".)

In August, Microsoft reduced the price of the Surface Pro by $100.

Looking at the trend, I would say that Microsoft is testing the market, gradually dropping the price and measuring demand. Economics 101, so to speak.

My guess is that Microsoft will keep measuring and dropping the price. Or perhaps dropping the price and removing features. The cannot change the hardware (assuming they sell the existing units) so they may remove software. The natural selection would be to remove the "no business use" version of Microsoft Office, but with the dearth of apps in the Microsoft app store, it would render the device all but useless. Could they remove something else?

Microsoft seems to be announcing changes every month. Let's see what September brings.

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