MSFT Microsoft Corporation

By Shira Ovide 

Microsoft Corp. announced a new lineup of computing devices of its own design, including two new smartphones, the company's first laptop and an updated wrist-worn device, pushing the software company further into the hardware business.

At a press event Tuesday in New York, Microsoft unveiled two new models of its smartphones, the Lumia 950 and Lumia 950 XL, which are aimed at the same segment of the market as high-end smartphones such as Apple Inc.'s iPhone. Microsoft hardware executive Panos Panay touted features such as cameras that work well in low light, and a special port that can be used to quickly recharge the phones.

In a surprise, Microsoft showed off two new models in its Surface line of convertible tablet-to-laptop computers. Microsoft executives billed the new Surface Book as more like a laptop than its predecessors, though the Surface Book also has a keyboard that can be removed from the screen for use like a tablet. Microsoft also announced an updated version of its Surface Pro model.

The string of announcements from Microsoft underscores the company's push into computing hardware during the past three years, starting with the first Surface device in 2012. Microsoft CEO Satya Nadella has said the company's self-designed hardware, which has been controversial among investors, is crucial to help Microsoft keep pace with rapid changes in consumer technology.

The hardware business remains a challenge for Microsoft, particularly in smartphones. At the event, Mr. Panay made a pitch for Windows smartphones, which have less than 3% market share globally. "If you haven't thought about these phones, wake up," he said.

Microsoft has been seeking for five years to find success with its smartphone operating software, and since last year with smartphone designs it acquired along with Nokia Corp.'s mobile-phone operation. The company this summer wrote down about 80% of the value of the $9.4 billion deal, essentially an admission that Microsoft's smartphone strategy needed a reboot.

Terry Myerson, the executive who leads Microsoft's Windows business, said the Lumia phones are Microsoft's effort to show the best of Microsoft hardware and software, and serve as a model for other companies that make computing devices powered by Windows. He said the Lumia devices could follow the path of the Surface line, a once money-bleeding business that has won over some computer users and improved its financials.

Microsoft makes its own devices to "create and reinvent categories," Mr. Myerson said at the New York event.

Microsoft said the new Surface Book, with a 13.5-inch screen, has a starting price of $1,499. Apple Inc.'s MacBook Pro, to which Microsoft executives compared the Surface Book, starts at $1,299 with a high-resolution 13-inch screen. Microsoft said the Surface Book will be available for purchase Oct. 26.

Microsoft executives didn't immediately address the potential for backlash from computer makers such as Dell Inc. that make laptops powered by Microsoft's Windows operating system. As Microsoft releases more of its self-designed hardware, it has the potential to ramp up competition with the cadre of PC makers on which Microsoft has relied for decades to generate Windows licensing revenue.

Representatives from Microsoft, Dell, Hewlett-Packard Co. and Lenovo Group Ltd. didn't immediately comment on the potential for competitive clashes.

Microsoft also showed off Tuesday a second edition of the Microsoft Band, a device worn on the wrist that combines features of a fitness tracker with elements of a smartwatch. The new Band, which is sleeker in shape than the first version introduced a year ago, also has new features such as the ability to use Microsoft's Cortana digital-voice assistant, and additional fitness monitoring features such as the ability to track a wearer's elevation.

Write to Shira Ovide at shira.ovide@wsj.com

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(END) Dow Jones Newswires

October 06, 2015 14:24 ET (18:24 GMT)

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