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Microsoft Increases Surface Production, Retail Outlets

Microsoft Corp. (MSFT) said it has boosted the production of its Surface RT tablet computer and will make the device available at more retail stores. Staples Inc. (SPLS) and Best Buy Co. (BBY) will start sales tomorrow.

Customers will be able to buy the Surface running Windows RT software, an update to the company’s flagship operating system, at an expanded list of retail stores in the U.S. and Australia “as early as mid-December,” Microsoft said today in a statement. The Redmond, Washington-based company also will extend its Microsoft holiday stores, including turning some of the temporary outlets into permanent ones.

Microsoft has been selling the devices since Oct. 26 only at its more than 60 retail locations in the U.S. and Canada, and online in seven countries. The company has declined to provide sales numbers, leading some analysts to express concern demand might be falling short.

Best Buy said it will offer Surface tablets online from tomorrow, and in some retail outlets starting Dec. 16.

With the added distribution, Microsoft should sell about a million units this quarter, according to Rick Sherlund, an analyst at Nomura Holdings Inc.

Additional retailers will be added in “a number of countries in the coming months,” Microsoft said in the statement. The company didn’t elaborate or say how much it expanded production.

Microsoft said last month that it will introduce a new model of the device, the Surface Pro, in January. That device features an Intel Corp. (INTC) i5 processor. Microsoft may release a version with Intel’s Clover Trail chip, which would offer better battery life and performance, “perhaps by March,” Sherlund said.

To contact the reporter on this story: Dina Bass in Seattle at dbass2@bloomberg.net

To contact the editor responsible for this story: Tom Giles at tgiles5@bloomberg.net

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