Microsoft will replace last year's Surface RT and Surface Pro with the Surface 2 and Surface Pro 2. Despite some nifty updates, the Surface 2, which runs on the unpopular Windows RT mobile operating system platform, will hit the market at $449. The original didn't sell well at $499, so Microsoft moved to mark it down to a more accessible price. It remains to be seen why Microsoft isn't being as aggressive as it needs to be, especially now that consumers are hesitant to embrace a mobile operating system that may be on the way out.
Amazon, on the other hand, was aggressive. Its now entry-level Kindle Fire HD is being marked down to $139. It seems to have done reasonably well at $199, when it was introduced last year, but Amazon understands that prices matter.
Yes, the Surface 2 has a larger display and some notable features, but Microsoft didn't seem to get the memo about why the original was so poorly received at a stiff price point.
Briefly in the news
And now let's take a quick look at some of the other stories that shaped our week.
- LeapFrog (NYSE: LF ) continues to collect accolades for its LeapPad Ultra learning tablet. The maker of educational playthings has seen its $149 tablet get added to Toys R Us' Fabulous 15 list and The Toy Insider's "Hot 20" 2013 list.
- Target (NYSE: TGT ) is giving digital video a shot. The cheap-chic discounter is introducing Target Ticket, giving customers online access to rentals and purchases of more than 30,000 movie and TV show titles. Going the on-demand route with piecemeal purchases hasn't been a winner in the past, but Target can't afford to be left behind.
- BlackBerry (NASDAQ: BBRY ) began the week by announcing that it will be acquired, cashing out investors at $9 a share. The smartphone pioneer capped off the week by revealing why it had to punch out on the cheap. It delivered a dreadful quarter, with hardware sales plunging and a massive hit on unsold devices. When gross margins clock in at a negative 24%, it's time to do some serious panhandling.
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