Microsoft cuts prices of Surface 2 in possible sign of new models this fall

Microsoft has cut the prices of its Surface 2 tablets by as much as 22%, dropping the entry-level Windows 8.1 RT device to $US349.

It's unknown whether Microsoft discounted the Surface 2 to clear inventory before it discontinues the tablet, in preparation for a successor, or simply to move a slow-selling product.

A clue may be in the length of the limited-time sale: Microsoft said that the reduced prices were good from August 24 to September 27, or "while supplies last," and set the maximum number of devices per customer at a generous five.

Intriguingly, Microsoft is to host a press event on September 30 to unveil the next edition of Windows, code named "Threshold" but perhaps officially to be called "Windows 9." Rumors have circulated that Windows RT will also be revamped to drop the desktop mode and/or to add support for the pen bundled with the Surface Pro 3.

If those claims are accurate, the September 30 event would be a perfect time to tout a revamped Windows RT and unveil replacements for the Surface 2.

Microsoft cut prices by $100 for each of the three Surface 2 models it sells: two Wi-Fi only tablets with 32GB or 64GB of storage, and a 64GB device that can connect to a cellular data network at LTE speeds.

The lowest-priced 32GB Surface 2 is now priced at $349, a 22% discount, while the 64GB tablet now costs $US449, an 18 per cent reduction. The sole LTE model, now $US579, received a 15 per cent price cut.

Microsoft's Surface 2 is powered by Windows RT 8.1, the touch-centric, tile-interface that runs only "Modern," nee "Metro," apps. Windows RT cannot handle legacy Windows applications.

The Surface 2 was the follow-up to the disastrous Surface RT, the tablet which sold in such small volume -- and which Microsoft built in such large numbers -- that the company was forced to take a $US900 million write-off in mid-2013.

Although the Surface Pro 2, which went on sale alongside the Surface 2 in October 2013, was updated to the Surface Pro 3 in May of this year, the Surface 2 has not been refreshed since its launch.

Microsoft has said virtually nothing of the Surface 2 since the tablet's debut, and another device expected to run Windows RT, the Surface Mini, was aborted shortly before the May 2014 event that introduced the Surface Pro 3. According to reports, company executives, including CEO, Satya Nadella, decided not to launch the Surface Mini for fear that it would flop.

The Redmond, Washington company took another write-off for the June quarter of this year to account for the decision to not sell the Mini. It did not reveal a dollar figure for the write-down, but calculations by Computerworld pegged the loss for the Surface line overall at $363 million for that quarter.

At its new price, the 32GB Surface 2, which boasts a 10.6-inch display, costs less than Apple's entry-level 16GB iPad Mini with a 7.9-inch Retina-quality screen. That iPad Mini lists at $US399.

Microsoft is selling the re-priced Surface 2 on its online store.

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