Microsoft Launches 7-inch Tablet - Analyst Blog

Microsoft Corporation ( MSFT ) recently unveiled Toshiba's pocket-friendly Encore tablet with a 7-inch display and running on Windows 8.1 at Computex 2014. The device has been built by Toshiba, in association with Microsoft, Intel ( INTC ) Goodix, and AMI, and is the smallest size Windows slate to date.

The device is expected to be available for sale in the coming months, first in the U.S. followed by a worldwide release. However, the details regarding its price were not disclosed.

The tablet will possibly contest in the same space as Google 's ( GOOGL ) Nexus 7, a popular and compact 7-inch Android tablet that comes in at a reasonable price of $200. Given the fact that Toshiba's 8-inch Encore 2 will be priced at $200, the Encore 7 tablet may be priced below $200.

In April, Microsoft declared that it would offer Windows to manufacturers free of licensing fee for devices with display sizes of less than 9 inches. The move was aimed to make the manufacturers offer devices at lower prices to consumers. This would help facilitate a lower price point for Encore 7.

Moreover, working with partners instead of against them will help Microsoft create more opportunities to succeed. With numerous 7-inch Android tablets existing in the marketplace, some even priced at less than $100, Encore 7 will allow Microsoft to have a wider portfolio of smaller and low-end tablets running on its software and enable it to contest against Android.

The tablet comes with a 7-inch display and a resolution of 1024x600 pixels. It is powered by quad-core 1.3GHz Intel Atom Z3735 processor coupled with a 1GB RAM. It has 16GB of inbuilt storage, which can be expanded using a microSD card. It also features a front-facing camera with an unspecified resolution and 3.5mm headphone jack.

Microsoft is aiming to build a position in not just tablets but also smartphones. At present the company has limited presence in smartphones, a market that is dominated by Android and Apple 's ( AAPL ) iOS. Therefore, Microsoft expects to lower Windows 8.1 tablets and smartphones prices to less than $200 by the end of 2014.

Slashing prices of Windows tablets can lead to an increase in Microsoft's software market share. In addition, Microsoft's acquisition of Nokia will make Microsoft's operations more comparable to Apple's and Google's, which make their own mobile hardware. Moreover, it will also help Microsoft to boost its supply chain and distribution ability.

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

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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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