Microsoft on Tuesday unveiled a low-cost version of its Surface tablet computer, cutting the screen size of the device which starts at $499.
The new Surface 3 will cost less than the $799 starting price for the Surface Pro 3 introduced last year, but will also have a less powerful processor and lack some other features.
The new device comes with a screen of 10.8 inches, making it smaller than the earlier 12-inch screen versions of Surface, and gives Microsoft a new tablet that aims to compete with Apple's iPad Air.
"Surface 3 brings what customers love about Surface Pro 3 to more people, delivering the premium design and productivity of Surface in a more affordable device," said Panos Panay, who heads the Surface division for Microsoft.
The new Surface will have an optional feature not available on its predecessors -- the ability to connect to wireless carriers with a high-speed connection.
Microsoft touts the Surface as a tablet that can replace a laptop.
With sales topping $1 billion for the first time in the last quarter of 2014, analysts said the tablet appeared to be swinging to profitability.