Intel Corp (INTC)

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http://www.bloomberg.com/news/2014-05-20/microsoft-said-to-back-off-plans-to-debut-smaller-surface.html

Microsoft Corp. (MSFT), struggling to break into the tablet market, backed off plans to introduce a smaller version of its Surface tablet based on Qualcomm Inc. (QCOM) processors, people with knowledge of the decision said.

Microsoft Chief Executive Officer Satya Nadella and Executive Vice President Stephen Elop decided that the product in development wasn’t different enough from rivals and probably wouldn’t be a hit, said one of the people, who asked not to be identified because the plans weren’t public. Engineers had been working on the device and had planned to unveil it as early as today at an event in New York, two of the people said.

Instead, the company removed any references to Surface devices based on Qualcomm’s processors from the event and unveiled Surface Pro 3, an upgraded version of its pricier Windows-based tablet, which uses chips from Intel Corp. (INTC) and features a larger 12-inch screen. Microsoft is still working on smaller versions, Panos Panay, who runs the Surface business, said in an interview after the event. Panay declined to provide details on future products.

Microsoft’s Surface had just 1.3 percent share of the market in the first quarter, while smaller-size tablets accounted for 53 percent of sales in the period, according to researcher IDC. Nadella has said he wants to turn the Redmond, Washington-based company into one that focuses on “mobile first, cloud first.” ...