Microsoft has decided to cut the price of its flagship Surface tablet, leading to speculation that the company is worried about low sales or is possibly clearing stock in anticipation of a new line of tablets. The devices will now cost $350 for the 32GB model or $450 for the 64GB version. With a Touch Cover these prices increase by $100 to $450 for the 32GB model and $550 for the 64GB model.
This represents a significant undercut on other premium tablets on the market. In fact, the Microsoft Surface retails at $250 less than the 32GB iPad and $80 less than the iPad Mini. They don't just tackle Apple with this price cut though. The Microsoft Surface also undercuts the Nexus 10 by $150 at retail. With the cuts, Microsoft will be competing directly with smaller and lower cost alternatives like the Nexus 7 and Kindle Fire.
While sales numbers regarding the Microsoft Surface remain scarce, it is believed that the tablet isn't performing as strong as Microsoft had hoped or expected. The cut in prices could in response to that or it could also be something else altogether. Some are speculating that Microsoft is preparing to refresh their line of tablets. Just last week at their Worldwide Partner Conference Microsoft teased the idea of launching new versions of their Surface and Surface Pro tablets. It is believed that the surface would be in line to receive an upgraded Haswell Chip. The Surface Pro would possibly be outfitted with a Snapdragon 800 processor.
Whatever Microsoft decides to do, the damage appears to have been done when it comes to their Surface experiment. The price cut comes across to me as white flag. The interesting part will be to see what Microsoft does next. It isn't enough to make a comparable tablet to the iPad, they need to blow it out of the water. If Microsoft is able to release a tablet that does that, maybe then we'll see someone finally take a chunk out of Apple as of yet impenetrable armour.