Microsoft discounts Surface Pro 3, launches trade-in program

Microsoft Surface Pro 3
Michael Homnick

Microsoft has both cut the price of its Surface Pro 3 and is offering up to $650 towards the purchase of the tablet-cum-laptops to customers who trade in older Microsoft Surface devices.

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.

Surface buybacks Data: Microsoft

Microsoft is offering trade-in credits towards the purchase of a new Surface Pro 3 tablet-notebook, with amounts ranging from $84 for a 2012 Surface RT to $650 for a 512GB Surface Pro 3.

Copyright © 2015 IDG Communications, Inc.

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