Microsoft unveils cheaper Surface 3 tablet

Washington - 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 in 2014, but will also have a less powerful processor and lack some other features.

The new device comes with a screen of 27.4cm (10.8 inches), making it smaller than the earlier 30cm 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 $1bn for the first time in the last quarter of 2014, analysts said the tablet appeared to be swinging to profitability.