New Surface expected from Microsoft at NYC event (Update)

Sep 23, 2013 by Anick Jesdanun

Microsoft Corp. is expected to announce new Surface tablet computers, including a version with a smaller screen to compete with Google's Nexus 7 and Apple's iPad Mini.

The company has an announcement event scheduled in New York on Monday.

It comes about a month before Microsoft releases an update to its Windows 8 operating system on Oct. 17. Among other things, Windows 8.1 will be usable on smaller touch screens, which have become popular because they are cheaper and easier to carry. The previous version of Windows 8 was limited to tablets with 10-inch to 12-inch (25-centimeter to 30-centimeter) screens.

The new Surface tablets could also get lighter and thinner thanks to a processing chip that uses less energy and doesn't require a fan. Known as Haswell, the chip is already used in laptops from Apple, Samsung, Dell and other companies. Apple's 13-inch (33-centimeter) MacBook Air with Haswell gets up to 12 hours of use, compared with seven hours before.

Microsoft began selling Surface tablets last October, but sales have been slow. The company shipped about a million tablets in the first three months of 2013, according to research firm IDC. That includes about 260,000 of the slimmed-down RT version of Surface and 750,000 of the Pro version, which is compatible with older Windows programs. The shipments gave Microsoft a meager 2 percent share of the tablet market in the first quarter. By the second quarter, Microsoft tablets dropped out of IDC's Top 5.

Microsoft, which is based in Redmond, Washington, absorbed a $900 million charge in the April-June period to account for its expected losses from the Surface RT after it slashed prices to stimulate demand. The $150 cut brought the price of the Surface RT with 32 gigabytes of memory to $349. The Surface has a 10.1-inch (25.6-centimeter) screen measured diagonally. The RT version is 1.5 pounds (680 grams). The Pro version is 2 pounds and starts at $799, $100 less than it was at launch.

Microsoft has manufactured devices before, such as its Xbox gaming console. In selling the Surface, the company became a competitor to its many manufacturing partners, which rely on its Windows operating system to power their machines. Microsoft is trying hard to succeed in tablets because personal computer sales are falling.

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