Microsoft's Surface 3 starts at $499, eligible for free Windows 10 upgrade

The Surface 3 tablet has a 10.8-inch screen with a 1920 x 1280-pixel resolution, and can double up as a laptop with a keyboard attachment. The tablet provides 10 hours of battery life when playing video.

With prices starting at US$499, the tablet is positioned by Microsoft as a nimbler, less expensive version of the faster Surface Pro 3 tablet, which starts at $799. Surface 3 will ship in 26 countries starting in May, and an LTE version of the tablet will be available through carriers later this year, Microsoft said.

The tablet can be ordered starting Tuesday via Microsoft's online store and other retail websites.

Surface 3 will come with a full version of Windows 8.1. Microsoft did not want to wait until the release of Windows 10 later this year to ship the tablet, a Microsoft spokeswoman said.

The Surface 3 is targeted at consumers, and succeeds the Surface 2, which was released in 2013 with an ARM processor and the tablet-specific Windows RT OS. Microsoft is scrapping Windows RT as it moves to Windows 10, and the company is blending more laptop functionality in Surface 3, which will have full versions of Office and Outlook.

The Surface 3 looks like a smaller version of Surface Pro 3, but won't offer as much graphics or application performance. Microsoft has sacrificed performance for longer battery life with Surface 3, which has no fan and runs on a low-power Intel Atom X7 chip code-named Cherry Trail, which isn't as fast as the Intel Core processor in the Surface Pro 3.

The Surface 3 is for basic Windows users, while the more expensive Surface Pro 3 is for power users, a Microsoft spokeswoman said.

Other features in Surface 3 include a rear 8-megapixel camera and a 3.5 megapixel front camera. Users can select 64GB or 128GB of storage. The tablet has a full-sized USB 3.0 port, mini DisplayPort slot, and a micro-SD card reader. A kick-stand at the back will place the laptop in three positions on a table.

A slew of accessories for the tablet will be available separately. A $129.99 Surface 3 Type cover doubles up as a keyboard and case, a $49.99 Surface Pen stylus helps users take notes, and a $199.99 Surface 3 Docking Station provides expansion through mini-DisplayPort, Gigabit Ethernet, USB 3.0 and USB 2.0 ports.

It remains to be seen how the Surface 3 performs. After four years of unabated growth, tablet shipments have flattened. But Microsoft's Windows OS will take market share from Apple's iOS and Google's Android in the coming years, according to IDC.

In 2014, Windows's share of the tablet OS market was just 5.1 percent, trailing Google's Android, which had a 67.3 percent market share, and Apple's iOS, which had a 27.6 percent share. IDC is projecting Windows to have a share of 14.1 percent by 2019, with the share of Android and iOS gradually falling to 62.9 percent and 23 percent respectively.

Competitors like HP, Dell and Lenovo are already selling low-cost Windows 8 tablets at competitive prices. But the real uptick of Windows tablets could start with Windows 10, which is still in beta and has received positive reviews as both a mobile and PC OS.

Agam Shah covers PCs, tablets, servers, chips and semiconductors for IDG News Service. Follow Agam on Twitter at @agamsh. Agam's e-mail address is agam_shah@idg.com