Microsoft Drops Surface Pro Tablet Price on Heels of Surface RT Cuts

A 128GB Surface Pro tablet will now cost $899, while the edition with half the storage will cost $799.

With technology giant Microsoft struggling mightily to gain a foothold in a tablet market dominated by Apple's iPad devices and a slew of low-cost tablets running Google's Android operating system, the company slashed prices on its Surface Pro tablet by about $100 for both the 64GB and 128GB models.

Among the areas that will see a 10 percent reduction in the cost of the Surface Pro are the United States, Canada, Taiwan and Hong Kong. A 128GB tablet will now cost $899, while the edition with half the storage will cost $799. A small disclaimer on the Surface Website notes the deal is only in effect until Aug. 29 and does not include the Touch Cover detachable keyboard.

Microsoft cut prices on its Surface RT tablet in July in an attempt to spur demand. The price for the standard Surface RT tablet, which lacks the soft cover doubling as a keyboard, fell to $349 from $499, while the version that includes the keyboard dropped to $449 from $599. Both versions offer 32GB of storage, while the Surface tablet with double the memory saw the price drop to $449 sans a keyboard cover and $549 with the cover included.

Although the price drop made the Surface RT among the least expensive tablets in its class, the device still faces an uphill battle. Several factors limit the Surface RT's appeal, including corporate apathy, limited network connectivity and, crucially, its inability to run the vast majority of the software in the x86-based Windows ecosystem. Some of those shortcomings are remedied in the Pro, which runs the full version of Windows 8 on an Intel processor and therefore slips seamlessly into corporate IT asset and user management environments.

Microsoft sold 900,000 of its Surface devices in the first quarter of 2013, according to a May report from IT research firm IDC. Many of those units, according to the report, were Surface Pros, which the company started shipping to the United States and Canada in February. Beyond the Surface products, Windows 8 and Windows RT tablets continue to struggle to gain traction in the market. Total combined Windows 8 and Windows RT shipments across all vendors reached 1.8 million units, the report noted.

Microsoft's annual 10-K report to the Securities and Exchange Commission, which was published on July 30, revealed the two tablet models the company sells brought in revenue of $853 million, less than the $900 million write-down Microsoft took on the unsold masses of its first tablet model, the Surface RT. Meanwhile, Microsoft upped its advertising expenses by 10 percent—equaling $1.4 billion—to push the Windows 8 operating system and the Surface tablets.