Microsoft Slashes Price Of Surface RT Tablet By $150 To Stem Sliding Demand

Microsoft Corporation (NASDAQ:MSFT) cut the price on all variants of its Surface RT tablet by $150 in an attempt to lure customers in a market dominated by bestsellers from competitors such as Apple Inc. (NASDAQ:AAPL) and Samsung Electronics Co. Ltd. (KRX:005930).

Microsoft's website, on Sunday, showed the least-expensive model of the Surface RT tablet (the 32 GB version) is now priced at $349, down from $499. The same device, with a cover that also serves as a keyboard, is now available for $449, down from $599. The 64 GB version of the device, without a keyboard cover costs $449, while the price of the same device with the attachment has been reduced to $549 from $699.

The Wall Street Journal reported that sales of the Surface RT have been disappointing, and some involved with the device have accused Microsoft of not doing enough to explain why consumers should choose the RT version of Windows. Unlike the costlier Surface Pro, the Surface RT doesn't run older Windows-compatible software programs, such as iTunes or Quicken financial software.

In a bid to lure customers, Microsoft tried discounts on the Surface RT recently, by offering a free cover-cum-keyboard to people who bought the device -- but the effort didn't deliver as expected.

Since its launch in October, Surface has been eschewed by both retail and corporate consumers, with shipments of Surface RT and Surface Pro tablets adding up to a total of only 900,000 units in the first quarter of this year, according to IDC. In comparison, Apple's iPad sold 19.5 million units in the same period.

Although Microsoft is having a tough time in gaining traction in the tablet market, where only 3.7 percent of devices run its Windows operating system, worldwide shipments of tablets are growing faster than ever before and are expected to surpass the entire personal computer market by 2015, IDC said.

Online retailers such as Best Buy Co. (NYSE:BBY) and Staples Inc. (NASDAQ:SPLS) have also started listing the discounted prices for the Surface RT tablets.