Microsoft unveils bigger Surface tablet, commits to hardware

By Bill Rigby

NEW YORK (Reuters) - Microsoft Corp on Tuesday unveiled a larger but lighter version of its Surface Pro tablet as it ramps up efforts to make an impact on the mobile computing market and counter the popularity of Apple Inc's iPad and MacBook Air laptop.

At a presentation in New York, new Chief Executive Officer Satya Nadella made it clear that Microsoft, which recently acquired Nokia's handset business, is committed fully to making its own devices, despite a lack of success for its phones and tablets so far.

"We are not building hardware for hardware's sake," said Nadella, at the event. "We want to build experiences that bring together all the capabilities of our company."

Microsoft, which is recasting itself as a 'devices and services' company, has not made much headway on the devices side, except for its Xbox game console.

The Surface, launched in October 2012 and refreshed last year, has about 2 percent of the tablet market, failing to make a dent on Apple's iPad. Microsoft has only 3 percent global share in smartphones, chiefly through Nokia.

Microsoft is hoping that the new Surface Pro 3, which runs the full Windows operating system, will be the device consumers and companies go to when they are replacing laptops.

Initial reaction was positive, but analysts have doubts that Microsoft can easily haul itself into a meaningful position in the hardware business.

"This is Microsoft's best shot yet to move the needle in the right direction on market share gains," said Daniel Ives, an analyst at FBR Capital Markets. "The odds are stacked against Microsoft, although we have to credit Nadella with putting his pedal to the metal to go after tablet market share, which remains key going forward."

The new device has a 12-inch screen, slightly bigger than its last model, but is thinner and weighs less. It comes in three models, starting from $799, and will be available to order this week.

(Reporting by Bill Rigby, Editing by Franklin Paul and Tom Brown)