Report: Microsoft's Intel-Powered 'Surface Pro 3' Could Be Unveiled Next Week

Microsoft is holding an event May 20, where it's expected to unveil a smaller version of its Surface tablet, but it looks like another new addition to the Surface family could also be making its debut.

In a support article published Tuesday, Microsoft indicated that a new update for Windows 8.1 "adds support to the Surface Pro 3 camera." The Surface 3 mention was first spotted by The Verge.

In addition, the new, smaller Surface model -- sometimes referred to as Surface Mini -- will use Qualcomm chips for the first time, according to Bloomberg, which also reported earlier this month that Microsoft will unveil Intel-based Surface models at the May 20 event.

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A Microsoft spokesperson declined comment, citing company policy of not responding to "rumors or speculation."

Microsoft has said it's committed to developing the Surface product line, but the company's tablet hardware debut has had its share of ups and downs.

Microsoft took a $900 million charge last July on unsold Surface RT inventory, and so far the Surface business has lost around $300 million since the first products hit store shelves in October 2012.

Microsoft's Surface revenue dropped from $893 million in the holiday quarter to $494 million in its latest quarter. Overall, Microsoft lost $45 million on Surface during the quarter, which was 15 percent more than it lost in the previous quarter.

At the same time, Microsoft said Surface revenue rose more than 50 percent from last year's quarter.

Since only a handful of Microsoft partners can sell Surface, the channel isn't exactly abuzz with excitement over Microsoft's apparent intent to continue developing and expanding the Surface product line.

Microsoft reached out to several partners late last year to gauge their interest in selling Surface, but nothing came of those efforts. Microsoft has been telling partners not to expect any new information on its Surface channel plans until its Worldwide Partner Conference in July, sources told CRN this week.

Microsoft is trying to raise its profile in a tablet market dominated by Apple and Google. It could make a big splash by rolling out a Microsoft-branded tablet with dual-boot Windows 8 or Android, one longtime Microsoft partner told CRN, speaking on condition of anonymity.

The fact that Microsoft is already selling Android-powered smartphones from Nokia, which is now part of Microsoft after the $7.2 billion acquisition received regulatory approval earlier this month, supports the idea that Microsoft might consider a big move like this to improve its standing in the tablet market, the source said.

PUBLISHED MAY 14, 2014