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Microsoft is making a cheaper version of its Surface Pro 3 tablet computer in an effort to appeal to students and budget-conscious families.

The new Surface 3 has a slightly smaller 10.8inch screen, but will run a full version of Windows.

Microsoft hopes it will be able to replace a traditional laptop for many buyers, and help it fend off Apple's iPad and Macbook laptops.

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Microsoft hopes the new cheaper tablet will appeal to students and budget-conscious families - and lure buyers away from Apple.

'As we planned the next addition to the Surface family, the questions to answer for our customers became simple,' said Panos Panay of Microsoft.

'What product would we build to be sure we could make the very best of what we built in Surface Pro 3 available to many, many more people? 

'We started with what we're known for — a great tablet that works as a laptop, the ability to run all Windows apps including full Office, and a pen experience that really sets Surface apart. 

'We knew we would offer all of this in a more affordable package but decided at the outset that we would make no compromise on maintaining the beautiful fit and finish, the craftsmanship that so many love in our Surface products.' 

Priced at $499 (vs $799 to $1,949 for the Pro 3), the new tablet has a slightly smaller screen - 10.8 inches rather than 12 - a slower processor, and less flexible kickstand - just three angles rather than unlimited positions.

A version with more storage and memory will cost $599. 

The firm will sell keyboard covers for £129, turning the tablet into a full featured windows laptop.

Microsoft will also sell a stylus for the Surface 3 separately for $49

A keyboard cover, one of the Surface's distinctive features, adds another $129. 

Microsoft bills the Surface line as a laptop replacement when used with the cover. 

And Microsoft will sell a stylus separately for $49. (It's included with the Pro 3.) 

The new Surface model is thinner and lighter, partly because it gets rid of the fan - similar to Apple's new MacBook laptop. 

At 214 pixels per inch, the screen resolution is comparable to the Pro 3's.

Battery life is promised at 10 hours for video playback. 

The Surface 3 runs the regular version of Windows 8.1, just like the Pro 3. In the past, Microsoft has used a lightweight version called RT in its cheaper tablets. 

The Surface 3 also has a USB port, a feature that distinguishes the Surface line from most rival tablets.

Introducing the new Microsoft Surface 3 tablet