What's behind Microsoft's Surface fire sale?

Is Microsoft clearing out excess inventory of its Surface devices (especially its ARM-based ones) in preparation for next-generation devices?
Written by Mary Jo Foley, Senior Contributing Editor

Next week at Microsoft's TechEd conference in New Orleans, Microsoft is offering attendees a deal on Surface RTs and Surface Pros. Limited to one RT and one Pro each, per attendee, users can pick them up for $100 (for the RT) and $399 (for the Pro).


That price is substantially cheaper than the $399 Surface RTs that WPCentral reported seeing in Staples a week or so ago. (The regular, non-discounted Surface RT price is $499 for the 32 GB version and $599 for the 64 GB one, plus covers for an additional $120 to $130 each.)

Piling on, Microsoft also just announced another Surface RT promotion: a free touch or type cover for every Surface RT purchased in the U.S. and Canada between May 31 and June 30.

Microsoft officials continue to say the company isn't backing away from Windows on ARM. Windows Blue will include both Windows 8 and Windows RT flavors, with both of these coming in the form of public previews on June 26. In recent ad spots, Microsoft has chosen to pit against the iPad mostly Windows RT devices (including the Surface RT), rather than Intel-based Windows 8 ones.

So what's a Windows watcher to make of Microsoft's apparent firesale on current generation Surfaces? The obvious explanation is Microsoft is clearing out its own unsold inventory in preparation for the next wave of Surfaces.

Microsoft officials have continued to decline to say how many Surfaces the company made or sold to date. The most often-cited estimate is somewhere in the vicinity of one million Surface RTs sold in Q4 2012 and 400,000 Surface Pros in Q1 2013. It's been rumored that Microsoft substantially overestimated demand for the ARM-based Surface RTs and underestimated the popularity of the high-end, 128 GB Surface Pros.

We know there is more Surface-branded hardware coming from Microsoft. According to sources of Windows SuperSite's Paul Thurrott, Microsoft has bullish projections about how many Surfaces it can sell in its fiscal 2014 (which starts July 1 of this year): 25 million Surface devices.

We also now know there's a 256 GB Surface Pro model that is starting to roll out, beginning in Japan on June 7. And there have been plenty of rumors about a new "mini" Surface that will fall between 7 and 8 inches, depending on whose sources one believes. 

Though no one from Microsoft has said publicly when and if the company will start using Intel's new Haswell or Atom chips in second-generation Surfaces, many users are hoping this will happen before this year is out, so that they'll have higher battery-life devices that can run their existing Windows apps. Many users also are hoping that 4G connectivity, keyboards providing extended battery packs, and maybe even Surface docks could arrive sooner rather than later. Microsoft officials have not promised when or even if any of these will be available. 

While we wait for more about what's coming on the Surface front, Microsoft is continuing to update the Surface RT and Pro firmware and apps.

Microsoft made available to Windows 8 and Windows RT users on May 31 an update to its suite of "core" apps, which include the Mail, People, Calendar and Messaging apps. The updates are available to users from the Windows Store on Surface devices, though possibly not for other Windows 8/Windows RT PCs and tablets. According to the release notes on my Surface RT, the updates are focused on reliability and performance. I am not sure what's in the updates specifically, as the release notes are old. I've asked Microsoft for clarification, but have not heard back.

As my ZDNet colleague Ed Bott noted today, these core apps won't be updated again as part of the Windows 8.1 "Blue" preview; that will happen when Blue is released to manufacturing. But Microsoft will be updating a number of the other Microsoft-developed apps that it ships with the operating system as part of the preview.

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