Weak demand forces Microsoft Surface $US150 price cut, Nokia defends picking Windows Phone

Microsoft confirmed it is cutting the prices of its Surface tablets by $US150 as Nokia chief executive Stephen Elop defended his company’s decision to choose Windows Phone over Android.

Bloomberg reports Microsoft was forced to make the price cuts after the company’s consumer Surface tablet managed to sell just 900,000 during each of its first two quarters on the market, representing less than 1.8% of the market.

In Australia, all Windows tablets – both from Microsoft and key hardware partners such as HP and Dell – account for just 8% of the Australian market, compared to 56% for Apple and 26% for Android (including Samsung).

In a desperate bid to boost sales, Microsoft has dropped the price of its entry level Surface RT tablet (without a keyboard) from $US499 to $US349, or $US449 with a keyboard.

Meanwhile, Nokia chief executive Stephen Elop has defended his company’s decision to opt for Windows Phone over Android during an interview with The Guardian.

“I’m very happy with the decision we made. What we were worried about a couple of years ago was the very high risk that one hardware manufacturer could come to dominate Android. We had a suspicion of who it might be, because of the resources available, the vertical integration, and we were respectful of the fact that we were quite late in making that decision. Many others were in that space already.

“Now fast forward to today and examine the Android ecosystem, and there’s a lot of good devices from many different companies, but one company has essentially now become the dominant player.

“Strategically [offering an alternative OS is] important for us. Having a conversation with [chief executive] Ralph de la Vega at AT&T, the first step in the conversation is the recognition that we’re not Apple, we’re not Samsung/Android – used to be Android/Samsung, it’s actually about Samsung now – we’re a third alternative.


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