Microsoft Unveils Surface Pro 3 Tablet - Analyst Blog

Microsoft Corporation MSFT recently added a new member to its Surface tablet family with the launch of Surface Pro 3, the thinnest, lightest and largest laptop-tablet hybrid so far. The tablet is already available for pre-order and will reach customers in the U.S. and Canada in June and 26 other markets by the end of August. It comes in three models, which are priced in the range of $799 to around $2,000.

Surface Pro 3, as Microsoft claims, will remove the barrier between a laptop and a tablet and serve the purpose of both. Surface Pro 3 has the power and efficiency of a laptop combined with the portability and ease of a tablet. It runs on Microsoft's Windows 8.1 Pro operating system (OS). It has a 12 inch full high-definition HD screen, 4th-generation Intel INTC Core processor, up to 8 GB of RAM, click-in keyboards, 5MP front and rear cameras and a multi-position kickstand that shifts easily from movie mode to working and writing modes.

Moreover, Microsoft's new improved Surface accessories such as Surface Pro Type Cover, Docking Station for Surface Pro 3, a Surface Ethernet Adapter and new premium Surface Pen will enhance the performance of the new tablet.  Surface Pro Type Cover will transform it into a laptop in an instant; the Surface Pen with stress sensitivity will allow a more natural writing experience and the Docking Station will turn the tablet into a proper workstation.

Surface is a series of tablets produced by Microsoft in a bid to amalgamate its Windows OS with its own hardware. It has launched four Surface devices: Surface RT, Surface Pro, Surface 2 and Surface Pro 2 prior to the launch of Surface Pro 3.

Microsoft is battling to make a mark in the tablet market, which is at present dominated by companies like Apple AAPL with its iPad and Samsung with its string of Android-powered tablets. Surface has been able to eke out only around 2% of the market share. With the latest launch and the company's proficiency in business software, Microsoft expects to compete effectively against both Apple's tablets and its light-weight notebooks.

Moreover, with Surface Pro 3 Microsoft is targeting the enterprise market, where more and more big companies are permitting their employees to connect their own smart devices to the business network, a practice commonly known as Bring Your Own Device, or BYOD. Other big technology companies like Apple and Google (GOOGL) are already striving to build a position in the enterprise market.

Microsoft reported a better-than-expected third quarter, where Surface revenues increased more than 50% with a mix shift toward second generation devices. Even though the company is still not making money on its Surface devices, it is leaving no stone unturned to capture the imagination of customers.

Microsoft is also offering its services and technology across a larger number of devices, which could help it protect its still-leading share of key applications markets. We expect that the latest device will become a choice when customers and businesses decide to replace their laptops.

Currently, Microsoft carries a Zacks Rank #3 (Hold).


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