As a result of that price cut, the company is taking a $900 million charge, which is equal to a loss of $0.07 per share.
The charge reflects the new market value of the Surface RTs that are in Microsoft's inventory, the company's IR boss, Chris Suh explained to us over the phone.
He said Microsoft believes this new price point will help it start selling Surface RTs. He says Microsoft remains "100% committed" to the Surface business.
More to come, we're updating this one as we go since it's a breaking news story...