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 (NYSE:BB) 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.
Longtime Fool contributor Rick Munarriz has no position in any stocks mentioned. The Motley Fool recommends Amazon.com and LeapFrog Enterprises and owns shares of Amazon.com, LeapFrog Enterprises, and Microsoft. Try any of our Foolish newsletter services free for 30 days. We Fools don't all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.