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How Microsoft Can Boost the Struggling Surface

NEW YORK (TheStreet) -- Microsoft (MSFT - Get Report) has announced the release of its third-generation tablet/laptop computer, the Surface Pro 3, in two dozen additional worldwide markets, as it hopes of boosting sagging sales.

Microsoft shares were gaining 0.02% to $43.09 in mid-morning trading in New York.

Microsoft will begin selling its Surface Pro 3 in China, Australia, the U.K. and a good portion of Europe beginning Aug. 28th. In May, Microsoft introduced the mid-priced version of the device. Earlier this week, Microsoft announced the release of it's lower and higher-end Surface Pro 3s - the $799 Intel (INTC - Get Report)i3 equipped and the $1,949 i5 models.

Last month, Microsoft reported earnings of 55 cents per share on revenues of $23.4 billion, noting the Surface accounted for $409 million in revenues in the quarter - a mix consisting mostly of older Surface Pro 2s and the newly released Pro 3s. In the previous quarter, Microsoft had reported Surface sales of $500 million.

CLSA analyst Ed Maguire believes Europe should be a good market for the latest  Surface hybrid while Asia could be a more "wait and see" proposition. "The challenge comes from low-end devices," Maguire said in a phone interview. "But Microsoft has different targets in mind. It priced the base device lower than Apple's (AAPL - Get Report) MacBook Air because that's where it wants to compete."

In the US, the Surface Pro 3 starts at $799 and can easily top $2,000 for the highest-end models. The base model will retail for £639 ($1.075 USD) in the U.K. and AU$979 ($912 USD) in Australia. Apple's latest MacBook Air pricing starts at $899.

Jan Dawson, Chief Analyst with Jackdaw Research isn't quite sure there's additional demand for the Surface Pro 3. "It's still not clear whether there's a lot of demand for the product, and as such the impact may be muted," Dawson wrote in an email. "Microsoft has provided little evidence so far that the demand for the Surface Pro 3 is any stronger than demand for previous Surface products, which were also available in a wide range of countries."

The Aug. 28th global release date will reportedly coincide with Microsoft's expected next upgrade of its Windows operating system. Windows 8.1 Upgrade 2 will reportedly consist of a small number of separate OS fixes rather than the company's usual practice of offering one large software file.

The devices will officially be sold in Australia, Austria, Belgium, China, Denmark, Finland, France, Germany, Hong Kong, Ireland, Italy, Korea, Luxembourg, Malaysia, the Netherlands, New Zealand, Norway, Portugal, Singapore, Spain, Sweden, Switzerland, Taiwan, Thailand and the United Kingdom. A new slide-in Surface Pro 3 Docking Station ($200) goes on sale in the United States beginning on Aug. 15th.

-- Written by Gary Krakow in New York.

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Gary Krakow is TheStreet's Senior Technology Correspondent.

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