Microsoft Tablets on Sale Now

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Microsoft Corp. (NASDAQ: MSFT) announced this morning that its new Surface tablets would be available for a "special limited-quantity pre-order" today at 9 a.m. Pacific Time. Three versions of the tablet are available: the 32-Gbyte version without a Touch Cover keyboard is $499; the same device with a black Touch Cover is $599; and the 64-Gbyte version with a black Touch Cover for $699. The Touch Cover keyboard is also available separately in five colors for $120.

The tablets compare favorably in price to the iPad from Apple Inc. (NASDAQ: AAPL), which sells a 16-Gbyte WiFi-only version of the tablet for $499, a 32-Gbyte version for $599, and a 64-Gbyte version for $699. No keyboard included at any of those price points. The Kindle Fire tablet from Amazon.com Inc. (NASDAQ: AMZN) costs $499 in a 32-Gbyte WiFi only version and $599 in a 64-Gbyte version. No keyboard here either. Samsung's Galaxy Tab 10.1 starts at $399 for a 16-Gbyte WiFi only version.

The Surface runs a version of Windows called Windows RT, specially developed to run on processors from ARM Holdings plc (NASDAQ: ARMH). Next week Microsoft is expected to launch its latest OS, Windows 8, for processors from Intel Corp. (NASDAQ: INTC) and Advanced Micro Devices Inc. (NYSE: AMD).

Microsoft faces a tough slog in the tablet wars. Apple is the clear leader with a 60% market share, while Samsung and Amazon nab most of the remaining share. Sales projections call for Microsoft to grab 14% of the tablet market in 2014, but that is unlikely to put Microsoft's sales above either Samsung's or Amazon's.

The move into designing, building, and marketing its own tablets is a brave move on Microsoft's part. The company certainly has the cash to move the market its way, provided that it is willing to buy market share.

Microsoft's shares are trading up 0.5% at $29.66 in a 52-week range of $24.30 to $32.95, just before noon today.

Paul Ausick

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