Is the $150 price reduction on the Surface RT selling more devices? What does this mean for Windows RT? Read our investigative analysis beyond the break.
Microsoft recently dropped the price of the Surface RT by $150. And this isn’t just some special promotion for schools, students, or those attending a conference. No, this price drop is permanent and it applies to all models. Microsoft really had no choice as they are surely sitting on a large stockpile of unsold devices, and they need to make room for the successor to the Surface RT that Nvidia is eager to produce.
A lower entry point can certainly help sell devices. The now infamous HP Touchpad was largely well received, but it wasn’t until HP decided not to participate in the tablet market and dropped the price of their device to $100 that they sold out across the country. Is Microsoft having similar success, or do their devices continue to sit on shelves in stores and in warehouses?
Microsoft is probably never going to give us official sales numbers, nor are we likely to know how many devices they produced originally. For that reason, you should understand that the following data is but a small sampling, and may not represent the overall picture of sales.
Upon questioning numerous Microsoft Store employees across the West Coast, Windows RT Source asked two questions: 1) “Do you have Surface RTs in stock”, and 2) “Have you seen a dramatic increase in sales since the price drop?”
None of the store employees could answer more specific questions about sales number (no surprise there) so we’ll have to do with more non-specific answers.
Of the 20 stores we called, 100% answered in the affirmative to both questions. Upon asking if they’ve seen sales pick up since the price drop, many answered very enthusiastically. One employee in California said “Ohhhh yeah. It’s been night and day”. Another commented that sales have definitely picked up but and likened the new sales trend to when Microsoft bundled the Touch cover for free. Hearing from readers and anonymous internet beings who have been in the stores, we’ve also read reports that Microsoft’s stores have at times had lines of people purchasing the tablet.
The price drop is working. Exactly how well, we don’t yet know. The good news here is that this is a consumer win. The people are speaking with their wallets. Apple can get away with charging $500 per tablet, but virtually no one else can. Microsoft is hearing this and they’re responding. As such, they’re likely to come in at a lower entry point when the next round of devices becomes available by June of next year. Windows RT can sell, if it comes in at a value, not at a premium. Furthermore, this helps to solidify that Windows RT does in fact have a place in the market. In the past, Microsoft has struggled to turn genuine feedback into iterative improvements. We are, however, seeing this change. The #Xbox180 is perhaps the best example of the software giant changing course after complaints. Microsoft has made concessions for Windows users as well by adding a “Start tip” in Windows 8.1 where the Start button used to be. Just yesterday, Larry “Major Nelson” Hyrb confirmed that Microsoft is bundling the Xbox One chat headset with every Xbox One console. This too was as a result of feedback from consumers.
I find it highly unlikely that the next Surface will come in at an entry point as high as the original for these reasons. In addition to those already mentioned, nearly all of Microsoft’s OEM partners have dropped out of the race in terms of making Windows RT devices, so Microsoft now has pricing power on their side.
How many of you have purchased a Surface RT or are now considering it since the price drop? Let us know in the comments below.