Microsoft plans lower-cost Surface tablets to battle Apple

Surface Pro

Microsoft hasn't really refreshed the design of its Surface tablets since the 2014 Surface Pro 3, so it will be interesting to see Panos Panay's team can out-innovate Apple's popular but slightly dated iPad design.

Microsoft may be about to go below the surface in an effort to boost its Surface tablet business. That would give Microsoft a chance to score more sales during the Christmas and holiday shopping season, which is typically the busiest business period of the year for consumer-electronics sales.

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After abandoning both the Windows RT operating system and long-gestating plans for the release of a diminutive, affordable Surface Mini tablet, Microsoft made a decision to focus the consumer hardware efforts of the software-first company squarely on higher-end products. Bloomberg says the new models should start at about $400, but with plenty of upgrade options for more storage and cellular connectivity. The tablets will also come with USB-C connection technology, which is a standard being found in use by more laptops and smartphones. According to the sources, Microsoft is planning to target the sub $500 market which is now dominated by Apple iPads. Apple is the dominant player in the tablet market and makes iPads ranging from $329 in price all the way up to over a $1,000 with the iPad Pro.

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

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