
The report said that the mini-computer is expected to go into mass production later this year, as the company attempts to move swiftly to counter threats of the decline in PC sales which threatens its 75-billion-dollar software empire.
The report came a day after new figures showed PC sales declined 13.9 per cent in the first quarter, the biggest drop since 1994.
The poor figures had largely been expected because of the growing preference of consumers for tablets and smartphones - areas in which Microsoft products badly lag competitors like Google and Apple.
Microsoft introduced the Surface line of hybrid computers late last year hoping that the unique ability to run Windows programs on the device would offer a powerful alternative to the iPad and tablets running on Google's Android software.
Sales of the Surface have not been strong, however, due its relatively steep price and the popularity of 7-inch tablets that now comprise almost half of the tablet market.//DPA