Microsoft discounts Surface Pro 3, launches trade-in program
The reasons may be as mundane as a desire to move more units, or an attempt to reduce inventory before the company introduces a successor to the Surface Pro 3, which launched in June 2014.
The price cuts -- $100 off for any configuration -- debuted in late January, and were a repeat of discounts Microsoft offered during the holiday season late last year. This month, however, Microsoft expanded the $100 reduction to the lowest-priced Surface Pro 3, dropping it 12.5% to $699, and extended the offer through Feb. 28.
Previously, the sale omitted the 64GB, Intel Core i3-powered configuration, and was to end Feb. 7.
Discounts on the other Surface Pro 3 configurations ranged from 5% to 10%. The tablets -- which Microsoft hawks as replacements for laptops -- do not come with a keyboard, which costs an additional $129.99.
On Sunday, Microsoft also kicked off a buyback program, which credits customers for turned-in Surface RT, Surface 2, Surface Pro, Surface Pro 2 or Surface Pro 3 devices. The program runs through March 8.
The credits must be applied to an online purchase of a Surface Pro 3.
Trade-in credits vary by device and configuration, with the maximum of $650 for a 256GB Intel Core i5-powered Surface Pro 3.
A Surface 2, the discontinued 2013 tablet that ran Windows RT, a spin-off of Windows 8, maxes out at $114 for a 64GB device, $105 for a 32GB. (Computerworld priced all the Surface buybacks without a keyboard.) A Surface Pro 2, the predecessor to the current Surface Pro 3, will generate between $186 (for the 64GB configuration) and $361 (512GB).
The amounts Microsoft credits for returned Surface tablets were generally higher than the cash given by third-party buyback firms like Nextworth and Gazelle. For instance, Gazelle pays $156 for a 64GB Surface Pro 2, or $30 less than Microsoft credits, while Nextworth pays $198 for a 128GB Surface Pro from early 2013, or $9 less than Microsoft offers in a credit.
Customers will not be able to apply the credits toward the currently-reduced prices of the Surface Pro 3, however. Even if the timing worked out -- users must ship their Surface to CExchange, Microsoft's partner in the buyback program, which evaluates the device's condition, then issues the credit via an emailed redemption code -- the trade-in deal includes a clause stating, "Not combinable with storewide discount promotions."
Microsoft has run buyback programs before and discounted the Surface, both to juice sales of its tablet line.
The continued $100 discount could augur a refresh of the Surface Pro line, as did a similar price cut two months before the unveiling of the Surface Pro 2 in October 2013. But rumors of a Surface Pro 4 have pegged launch dates no sooner than July.
In the fourth quarter of 2014, Microsoft reported record Surface revenue of $1.1 billion, with a gross margin of between 19% and 20%, still low, perhaps even insufficient to cover marketing costs, but significantly higher than the third quarter's gross profit of just 9%.
Surface device owners can start the buyback process on Microsoft's website.