Microsoft and key retailers chop Surface RT prices by $150

Call it a back-to-school sale. Call it excess inventory clearance. Whatever you call it, Microsoft is stepping up its fire sale on its ARM-based Surface RT tablet/PC hybrids.

On July 14, as rumored last week, Microsoft and partners chopped the 32 GB Surface RT base price by to $349 (from $499) and the 64 GB model to $449 (from its original $599), at the Microsoft Store, Staples and Best Buy in the U.S.

That deal follows on the heels of steep Surface RT (and Surface Pro) discounting at some recent Microsoft conferences, including TechEd North America, TechEd Europe and the Worldwide Partner Conference (WPC). At WPC last week in Houston, many of the 15,000 in attendance stood in lines which occasionally lasted two hours to get a Surface RT device for $99 and a Surface Pro device for $399. Microsoft also launched a Surface RT discount for schools and universities (not for individual students) earlier this summer.

Microsoft execs have repeatedly declined to say how many Surface RTs the company had built and/or how many the company has sold since the devices were launched in October 2012. Some Microsoft watchers estimated the company had far too many Surface RTs produced, severely overestimating demand for the device which cannot run existing Windows apps.

At WPC last week, Microsoft's Chief Operating Officer Kevin Turner told attendees there were "upgrades" to the Surface RT and Surface Pro coming in fiscal 2014. (Microsoft's fiscal 2014 runs from July 1, 2013 to June 30, 2014.) Turner didn't specify whether these upgrades would be new models with more powerful ARM and x86 processors or not. Turner also said to expect new Surface accessories and accessory colors at some point in FY 2014.

Microsoft also is widely believed to be building its own 8-inch Surface mini product, which could debut this calendar year.

Surface customers will be able to refresh their devices with Windows 8.1 once Microsoft makes it available to customers later this year. The 8.1 release includes improvements to Surface's ability to work in portrait mode; a new Start Button and boot-straight-to-desktop option, and other performance and usability enhancements. The preview of Windows 8.1 is available for both Surface Pro and Surface RT users to test now. RTM of the 8.1 release is expected by late August 2013.

While some find the Surface RT's performance to be so lackluster that even a $349 price tag still isn't enticing, I'm not in that camp. The lighter weight and better battery performance (about 8-9 hours, compared to 4-5 for the Surface Pro) make the RT a better choice for me, as I use it as a PC companion device -- and not a PC replacement. I use my RT just like I used to use my iPad and find it fine for light email and Web browsing. The Surface RT's biggest limitation in my case is its reliance on Wi-Fi, as even here in New York City, Wi-Fi is still far from ubiquitous. 

Update (July 15): Looks like the Surface RT cuts are also coming to other countries. Neowin has a rundown: http://www.neowin.net/news/surface-rt-also-sees-price-cuts-in-europe-australia--more