Microsoft plans lower-cost Surface tablets to battle Apple

Remigio Civitarese
Mag 16, 2018

Microsoft (MSFT) plans to launch a line of lower-cost tablets to compete with Apple's (AAPL) iPad.

The new Surface tablets would cost about $400 and feature 10-in. screens, rounded edges, USB-C connectivity (a first for Surfaces), and weight about 20% less than the Pro models. Microsoft is rumored to have softened the appearance of the tablets, rounding off the corners to make them more like the iPad, rather than leaving them square, as with the current Surface Line. So if Microsoft makes and sells a low-priced Surface tablet powered by Windows 10, then the manufacturers would have the confidence to invest in tablets powered by Windows 10.

Microsoft has struggled to find a high-volume hit with the Surface devices as well as to introduce a flow of new choices to keep growth steady.

In the past year, Apple sold 44M iPads for $20B in revenue.

Regardless, many have been hoping Microsoft would release a new non-pro Surface at some point, as this line of Surface devices are far more affordable and approachable to the masses.

The biggest question about these new Surface devices is why.

The current professional-oriented Surface Pro lineup starts at $799.

Since 2015, Apple has rapidly added new productivity tools to the iPads, taking on Microsoft features like integration with digital drawing pens and using multiple apps at the same time. Microsoft is also planning to sell Wi-Fi only models along with Wi-Fi and LTE variants. Like the Surface Pro, these models won't be bundled with the company's keyboard cover.

Intel will be reportedly supplying processors and graphics cards for the rumoured Surface Tablet, and we wouldn't see Windows 10 on ARM in this device. Bloomberg's report claims a new 10-inch Surface will be powered by Intel instead. Microsoft, which hasn't finalized its plans, is expected to price the cheapest versions of the new device at about $400. The company stopped making it at the end of 2016.

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