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Will Microsoft’s New e-Tablet Help the Tech Stock

Ian Wyatt

It’s been a good year so far for the world’s second largest tech stock. Now Microsoft (Nasdaq: MSFT) is introducing its first-ever computer – an electronic tablet called the Surface that is intended to wage war with Apple’s (Nasdaq: AAPL) iPad.

But is the Surface little more than a pipe dream up against a product as dominant as the iPad?

From the sound of things, the Surface won’t be much different from the iPad. It weighs about the same, has a little bit larger screen and will have a similar price tag. Unlike the iPad, the Surface will come equipped with a keyboard, will have a built-in kickstand and will feature Microsoft’s soon-to-be-unveiled Windows 8 operating system, which will give users access to Microsoft Word and Excel.

But are those upgrades enough to steal much e-tablet business away from Apple?

The problem could be familiarity. People know the iPad, and know where to get it – either online, or at one of Apple’s hundreds of U.S. retail stores. Microsoft has but a small chain of retail stores, and its online store is more limited than Apple’s in certain countries.

While no release date for the Surface has been announced, nor has a final price, the real uncertainty is what impact the new product will have on Microsoft’s bottom line.

It’s understandable why Microsoft would want to break into the lucrative mobile market, where it has heretofore been nonexistent. But given that e-tablets and computers have never been the company’s specialty, competing with one of Apple’s most popular products on its first try might be expecting too much.

Microsoft has been one of the strongest performers in the technology sector in 2012. Entering the day, the tech stock had climbed 16% year-to-date. News of its new e-tablet has given the shares another 3% boost in early Tuesday trading.

The real test for what impact the Surface has on Microsoft’s stock, however, won’t come until the company’s first-ever computer is released – whenever that is. When it does hit shelves, the iPad will be waiting. And that could make life difficult for the Surface.