ACEIY Acer Inc (PK)

By Jay Greene 

Microsoft Corp. on Tuesday unveiled new laptops running a streamlined version of Windows it hopes will help it unseat Alphabet Inc.'s Google and Apple Inc. in the classroom.

The most ambitious new product: a sleek, lightweight laptop Microsoft hopes will compete with Apple's MacBook Air. The new Surface Laptop, which starts at $999 and comes in four colors, is a hair lighter and thinner than the Air, and has a slightly longer battery life at 14.5 hours, according to Microsoft.

Microsoft's partners, including Acer Inc., Lenovo Group Ltd. and HP Inc., rolled out new laptops for students and teachers starting at $189. Those devices are aimed at helping Microsoft catch up in the budget-conscious education market, which Google has seized with its Chrome operating system designed for low-cost laptops.

All of the new devices run Windows 10 S, a new variant of Microsoft's flagship operating system. The new OS only permits users to run apps obtained through Microsoft's online Windows Store, which the company says makes the devices more secure and easier to manage. That restriction, though, could frustrate a customer who, for example, tries to sync an iPhone but can't because Apple's iTunes isn't in the Windows Store.

The 2.76-lbs. Surface Laptop comes with 4 gigabytes of memory, while the comparably priced MacBook Air has 8 GB. Microsoft said that by limiting apps to just those in the Windows Store, it can improve the speed and battery life on the new devices by keeping out programs that degrade performance.

If customers want to use apps that aren't available, such as iTunes or Google's Chrome browser, they can pay $49 to upgrade to the Windows 10 Pro version of the OS sold to businesses. Other than limiting apps to those from the Windows Store, there is little difference between the two, according to the company.

Microsoft announced the new products at an event in New York focused on education. The move comes as Google has seized control of a market where Microsoft and Apple once were much stronger. Customers who use Chromebooks, which cost as little as $150, spend much of their time in browser-based apps such as Gmail and Google Docs. The laptops and apps are updated automatically, making them particularly appealing to schools, which might not have technical staff to manage devices.

Chrome OS accounted for 58% of mobile-computing devices -- laptops and tablets -- shipped to the U.S. kindergarten-through-12th-grade market in 2016, according to Futuresource Consulting Ltd. Windows registered a 22% share, while Apple held a 19% share.

That market, which hit $10.1 billion globally in 2015, according to Futuresource, is prize enough. But Microsoft and its rivals are eager to develop loyalties early, getting students hooked on apps such as email programs and browsers that they will stick with as they move to new devices.

What's more, the new devices come after Microsoft revealed its Surface computers struggled in the most recent quarter. Revenue for the hardware plummeted 26% in the three months ended March 31 as Microsoft hadn't refreshed the line in more than a year, and rivals stepped up competition on prices.

Microsoft is also introducing updates to the education version of its Office 365 productivity application that will run in Windows 10 S and will be available free to students, faculty and school staff. The company added Teams, a workplace-collaboration service introduced in November that competes with Slack Technologies Inc. The service includes features to let teachers run quizzes and help students join forces on school projects.

Students and schools also will receive a free one-year subscription to an education version of Microsoft's popular Minecraft game to teach coding.

While the $189 starting price for Windows 10 S devices is higher than the entry-level prices for Chromebooks, Microsoft said the laptops will support pen-based computing and apps that make use of augmented reality.

"We think we're entirely competitive in terms of price," Microsoft corporate vice president Joe Belfiore said in an interview.

Microsoft said its Surface Laptop will be available June 15. Acer said its $299 TravelMate Spin B1 device is available now.

The raft of new products should "stem the bleeding" for Microsoft in the education market, Forrester Research Inc. analyst J.P. Gownder said. He believes Microsoft's focus on reducing device-management costs and headaches will be key to lure some schools to the devices.

"The cost of Windows was way too high for schools," Mr. Gownder said.

Write to Jay Greene at Jay.Greene@wsj.com

(END) Dow Jones Newswires

May 02, 2017 16:14 ET (20:14 GMT)

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