Mircrosoft's Low-Cost Tablet to Rival Apple

Microsoft (MSFT) plans to launch a line of lower-cost tablets to compete with Apple’s (AAPL) iPad.

The software company said it plans to release the Surface tablets as early as June, according to a Bloomberg report citing “people familiar with the matter.”

The tablets will reportedly sell at a starting point of about $400 and have 10-inch screens and USB connections as well as several options for upgrades.

Microsoft tried to sell a lower cost tablet in 2012 along with an overall push toward consumer-oriented hardware with the launch of Surface RT. But consumer response was luke-warm, so the company shifted its focused to the Surface Pro, a more expensive model aimed at business professionals. (See also: Microsoft Could Make a Big Cloud Buy: BMO.)

Last year, the professional Surface line drew $4.4 billion in revenue for Microsoft, which is significantly lower than Apple’s $20 billion in revenue from its iPads during that time. Tablet sales increased 1.6% in 2017 from 2016, but sales in the fourth quarter were up 10% year over year, according to data from research firm International Data Corp.

Apple’s Foray Into Lower Cost Tablets

Apple launched its most affordable iPad model, with a 9.7-inch screen at a price of $329 in March. While that price point is lower than Microsoft’s planned new model, Microsoft will reportedly offer cheaper accessories. (Tablet Wars: After Apple iPad, Amazon is the New No. 2.)

Apple plans to debut upgrades to its iPad Pro this fall and announce major operating system upgrades at its annual Worldwide Developers Conference in June.