Indications are good that Microsoft may have found the sweet spot for Surface RT pricing, with sales of its Windows RT-based tablet increasing dramatically following a $150 price cut in the US.
Microsoft's first-party stab at the tablet market, Surface RT has had something of a rough time. Even ignoring initial teething problems
- software bugs, quality control issues and a rather thorny lawsuit regarding the amount of usable storage - the tablet hasn't exactly been an unalloyed success, with the company writing down $900 million in unsold inventory
and failing to even cover the cost of advertising
with the units it has sold.
These figures, however, do not include the impact of the company's recent dramatic price cut
that saw the cost of a Surface RT slashed by $150 in the US followed by £120 in the UK - both representing nearly a third of the original retail price. While still priced towards the top end of the market when the Touch Cover or Type Cover accessories are include - the cheapest of which adds a minimum of £100 to the purchase price - Microsoft clearly hoped to increase interest in the tablets.
It's a plan that appears to have worked. according to pro-Surface site Windows RT Source
, the price reduction in the tablet - which has dropped the entry price in the US to $349 excluding Touch Cover - has seen sales increase dramatically. While the site only contacted 20 stores within the US, and none were able to provide actual sales figures - something Microsoft, too, is refusing to share - all those surveyed claimed that sales have dramatically increased since the price reduction. 'It's been night and day,
' the site quotes one store as claiming.
For Microsoft, it's good news: Windows RT lacks compatibility with legacy applications, and the tablet market lives or dies by the quality of its software ecosystem. With sales flagging, there's little incentive for developers to produce Windows RT applications when they could be targeting much bigger markets with Android or iOS apps - but if the tablets are now selling, devs will be taking a closer interest in the platform.
The boost in interest comes as chip partner Nvidia - which has taken a considerable financial hit
from consumer disinterest in Surface RT tablets - confirms it is working on the Surface RT 2, which will be powered by the company's Tegra 4 'Wayne' processor. The company has yet to provide a release date, however.
While this is all very encouraging for Microsoft's tablet push - which, it must be remembered, is far from its comfort zone and taking on a market with a near-embedded duopoly in Google and Apple - not all is well with Windows RT: Asus has become the latest company to abandon the platform following a significant loss on its own-brand VivoTab RT product line.