Microsoft is preparing to take on Apple's iPad with a line of low-cost tablets, according to a Bloomberg report.
The new $400 tablets will feature 10-inch screens and rounded edges — closely mimicking the iPad — and could hit shelves as early as the second half of 2018, the news site said, citing anonymous sources.
Microsoft attempted to launch an affordable Surface-branded laptop in 2012 with the release of the Surface RT. It ran on Microsoft's less-powerful Windows RT operating system, however, and failed to gain traction due to a lack of apps.
Bloomberg said Microsoft would use an Intel processor this time — the Surface RT used a chip from Nvidia — to allow it to run more applications.
Microsoft may need to make sacrifices in other areas to keep the price down. Displays are commonly one of the more expensive components, so while it has adopted sharper screens for its standard line of Surface laptops, the screens in the more affordable models might not be as good.
Apple has left some room for another major player in low-cost tablets — the company's iPad revenue has declined every year since 2013.
Microsoft did not immediately return a request for comment from CNBC.
Read the full Bloomberg report here.