Microsoft Surface Pro Goes to China

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Microsoft Corp. (MSFT) will launch the latest version of its tablet Surface, Surface Pro in China this week according to a report from Forbes.

Microsoft Surface was launched worldwide on Oct 26, 2012, with a price tag of $499.0, which makes it comparatively expensive. However, it combines the functionalities of a tablet and a laptop.

Microsoft offers two versions of its Surface tablets to the consumer, one with Windows RT and another with Windows 8 Pro. Surface Pro is a laptop, which comes with some features of a tablet. Surface Pro is already available in the U.S. and Canada and is expected to hit Chinese markets this week.

On the other hand, the Surface RT, which is more of a tablet and has some features of a laptop is already available in China. However, only 14 units of the Surface RT were sold last week in China according to a report from Softpedia, indicating that the product has not really taken off in the country.

Last month, Microsoft had opened its main online store in China on Tmall.com, which is China’s largest consumer e-commerce platform, with more than 50,000 merchants. The opening of Microsoft’s Tmall site should help Microsoft to expand its presence and increase market share in China.

Microsoft is rapidly strengthening its global presence. However, it is a late entrant into the tablet market and beating the competition at this point will be an uphill task. Other successful tablets such as Apple’s (AAPL) iPads, Google’s (GOOG) Nexus 7, Samsung’s Galaxy tablets and Amazon’s (AMZN) Kindle Fire already have a strong presence in the market.

According to IDC, only 30,000 Surface RT tablets were shipped in China during the fourth quarter of 2012 and its market share among all tablets in the Chinese market was just 1%. In comparison, Apple led the race with a 62% share of the tablet market in China, while Android devices held a 36% share.

According to IDC, tablets are likely to touch 282.7 million units by 2016 withWindows-based tablets capturing 10.0% of the market within the same time period.

Although Microsoft has fallen back in the tablet race, there is still time to create its own niche. Combining the functionality of a tablet and laptop, Surface can create interest and attract new users. Hence, the availability of Surface Pro in the world's second largest e-commerce market, China, makes sense.

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

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