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Microsoft revamps Surface tablets to challenge Apple

(Reuters) – Microsoft Corp on Monday unveiled faster, more powerful versions of its Surface tablets in an effort to boost poor sales and mount a stronger challenge Apple Inc’s iPad.

Microsoft's Surface 2 is seen during the launch of their Surface 2 tablets in New York
Microsoft’s Surface 2 is seen during the launch of their Surface 2 tablets in New York September 23, 2013. REUTERS/Shannon Stapleton

The overhaul of the software company’s first own-brand computers comes less than a year after their launch. So far, the Surface has not been a success, with sales of $853 million outweighed by a $900 million charge for unsold inventory.

At an event in New York, Microsoft unveiled the new Surface 2, which runs on a low-power chip designed by ARM Holdings Plc. The price of the tablet starts at $449 for the 32 GB version.

The new Surface Pro 2, which runs on an Intel Corp chip and is more aimed at Apple’s lightweight MacBook Air laptop, starts at $899 for the 64 GB version.

Microsoft shares were steady at $32.79 on Nasdaq, while Apple shares rose 4 percent on strong sales of its new iPhone 5s and 5c models and a more optimistic financial forecast.

“Microsoft has been humbled by modest sales of Surface, but it’s not giving up,” said Sarah Rotman Epps, an analyst at tech research firm Forrester. “Microsoft is doubling down on Surface, making needed hardware improvements to appeal to businesses and consumers.”

The new machines will be available online, in Microsoft stores and at a few third-party retailers in the United States and most other major markets, except Japan, on October 22. It will be available in China in early November.

(Reporting by Sinead Carew in New York and Bill Rigby in Seattle; Editing by Gerald E. McCormick and John Wallace)

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Microsoft revamps Surface tablets to challenge Apple

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