Microsoft slashes price of Surface RT tablet by $150

The cut brings the price of the Surface RT with 32 gigabytes of memory to $349 without a cover, which also acts as a keyboard. Including a cover with a touch-sensitive keyboard, the device comes to $449. The Surface has a 10.1-inch (25.6-centimeter) screen measured diagonally.

(Also see: Tablet wars intensify as HP, Amazon, Barnes & Noble slash prices)

According to market research firm IDC, Microsoft shipped about a million tablets in the first quarter of 2013. That includes about 260,000 of the slimmed-down RT version and 750,000 of the Pro version of Surface (Review I Pictures), which is compatible with older Windows programs.

That gave Microsoft a slim 2 percent share of the 49.9 million tablets shipped worldwide. Apple Inc. remained the leader with 39.1 percent and was followed by Samsung Electronics Co., AsusTek Computer Inc., Amazon.com Inc. and Acer Inc. Microsoft was No. 6. Second-quarter figures are not yet out.

The cut, implemented Sunday, comes just days after Microsoft reorganized its corporate structure to become more of a "devices and services" company.

Microsoft has manufactured devices before, such as its Xbox gaming console, but when it began selling Surface tablets in October, the company became a competitor to its many manufacturing partners, who rely on its Windows operating system to power their machines.

Microsoft is trying hard to succeed in tablets because personal computer sales are falling. Research firm Gartner Inc. said worldwide shipments of personal computers fell 11 percent to 76 million in the April-June period, the fifth consecutive quarter of decline and the longest PC slump ever.