At a presentation in New York, new Chief Executive Officer Satya
Nadella made it clear that Microsoft, which recently acquired
Nokia's handset business, is committed fully to making its own
devices, despite a lack of success for its phones and tablets so
"We are not building hardware for hardware's sake," said Nadella, at
the event. "We want to build experiences that bring together all the
capabilities of our company.
The Surface Pro 3 tablet, which comes in three models starting from
$799 and costing up to $1,949, features a 12-inch screen, much
larger than Apple iPad's 9.7 inches. It also comes with access to
Microsoft's Office software suite, employed in businesses around the
Microsoft executives made frequent comparisons with the MacBook Air
at Tuesday's launch, making it clear that Apple's lightest laptop,
which starts at $899, was the device to beat.
The same executives, highlighting a focus on the enterprise segment
of the market, also talked up the limitations of existing tablets in
a full office environment.
Microsoft "has concentrated on its key strength - business users who
look at tablets as extensions and/or replacements for full laptop
capability," Jack Gold of J. Gold Associates wrote. "Microsoft
finally seems to understand it cannot go head to head with Apple's
iPad, and must offer a superior business device."
Microsoft, which is recasting itself as a 'devices and services'
company, has not made much headway on the devices side, except for
its Xbox game console.
The Surface, launched in October 2012 and updated last year, has
about 2 percent of the tablet market, failing to make a dent on
Apple's iPad. Microsoft has only 3 percent global share in
smartphones, chiefly through Nokia.
(A look at the global tablet market: http://link.reuters.com/ker49v)
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The Surface Pro 3 runs the full Windows operating system, and
Microsoft hopes it will be the device consumers and companies go to
when they are replacing laptops.
Initial reaction was positive, but analysts have doubts that
Microsoft can easily haul itself into a meaningful position in the
"This is Microsoft's best shot yet to move the needle in the right
direction on market share gains," said Daniel Ives, an analyst at
FBR Capital Markets. "The odds are stacked against Microsoft,
although we have to credit Nadella with putting his pedal to the
metal to go after tablet market share, which remains key going
The new device, which like previous versions uses Intel Corp
processors, will be available to order this week.
(This story corrects 5th paragraph; starting price of MacBook Air is
$899, not $629)
(Reporting by Bill Rigby, Editing by Franklin Paul and Tom Brown)
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