With the Surface 3, Microsoft finally puts forth a budget alternative to the Surface Pro 3 that’s worth considering—if only because it runs full Windows 8.1 rather than the limited Windows RT of prior Surface models. The $499 starting price doesn’t hurt either (the Surface Pro 3 starts at $799). But there’s more to the Surface 3 than that, and we dove straight in as soon as we received our unit.

Microsoft sent its higher-end Surface 3 for evaluation: the $599 version with 4GB of memory and 128GB of storage. (The $499 version has 2GB of memory and 64GB of storage.) As with its pricier cousin, everything else for the Surface costs extra: The separate Type Cover keyboard costs $130, partially offset by the free one-year subscription to Office 365 Personal, which saves you $70 initially. That 128GB of storage shrinks to about 93GB after setup, and about 88.8GB after installing Office.

A smaller Surface Pro 3

If Microsoft sold the Surface Pro 3 as the “tablet that can replace your notebook,” the Surface 3 offers a similar solution, only everything’s just a bit smaller, especially if you’ve been using the Surface Pro 3 as a daily driver, as I have. The Surface 3’s display measures 10.8 inches across, for example, with a resolution of 1920x1280 pixels, compared to the 12-inch, 2160x1440 display of the Surface Pro 3.

The Surface 3, left, and Microsoft’s Surface Pro 3.

The smaller display, combined with the Surface 3 Type Cover, contributes to a slight feeling of claustrophobia. Another noticeable limitation: The Surface 3 includes a kickstand with three fixed positions, rather than the nearly infinite range of pitch options with the SP3’s kickstand.

The fixed positions of the Surface 3 kickstand might be an acceptable compromise to some; personally, I prefer the Surface Pro 3’s variable pitch. Docking the Surface 3 alleviates some of the differences between the two tablets. Unfortunately, the $199 Surface 3 Docking Station is tailor-made for the Surface 3, so you won’t be able to reuse an older dock with the new tablet. The Surface 3 dock provides ethernet, two USB 2.0 and two USB 3.0 ports, miniDisplayPort, and a headphone jack. While the dock completely encloses the tablet’s own USB port, it also eliminates the power brick that most other docks include. Keep in mind that the Atom processor inside the Surface 3 requires minimal power, so a 13-watt microUSB charger comes with the Surface 3, and you can use your phone’s charger in a pinch. Mark Hachman The Surface 3 dock provides slightly less expandability than the Surface Pro 3 dock, but it saves you a power brick. Performance: better than you’d expect A quick round of tests shows that the Surface 3’s 1.6GHz Intel Atom X7-Z8700 powering the Surface 3 is no slouch. 3DMark Ice Storm tests CPU and GPU performance for cross-platform mobile devices. The Surface 3 outpaced all comparison devices, including the iPad Air 2. In Google's Octane test of JavaScript performance, the Surface 3 came out on top again, almost 20 percent faster than the next device, the Lenovo Yoga Tablet 2. We ran Geekbench 3’s single-core performance load, in 32-bit mode to improve compatibility with the prior-generation Atoms. The Surface 3 outpaced all the older devices, though nothing could keep up with the iPad Air 2. Regardless of the test, it's clear that Intel’s latest Cherry Trail Atom is noticeably faster than the Bay Trail version found in the Lenovo Yoga Tablet 2—a greater bump-up than the 5 percent to 10 percent improvement we saw when transitioning from Intel’s Haswell CPUs to the Broadwell chips found in its Core PC processor lineup. We’d expect similar performance boosts in other Cherry-Trail-based tablets. The bottom line: There’s been a vast improvement in performance over the various generations of Atom chips, and that’s a good thing: The early versions of Atom were so lacking that they nearly killed the entire brand. Microsoft claims the Surface 3’s battery life should be about 10 hours. We’ll be testing that soon. Mark Hachman The Surface 3's new, slightly smaller keyboard has a redesigned top row. There was one red flag: After running several benchmarks, the Surface 3 hard-locked, becoming totally unresponsive to mouse, keyboard, or touch. I suspected thermal issues related to the dock. Here’s why: The Surface 3 is completely sealed, relying on passive heat conduction. Yet Microsoft’s dock encases the rear of the tablet nearly to the top. A Microsoft spokesman said the company hasn't run into similar problems with other Surface 3 tablets. We'll keep testing. Building a better econobox Earlier versions of the Surface were rife with compromise. The Surface 3 has overcome the biggest problems (with the operating system and performance). The result is a basic, (hopefully) reliable performer for students and office workers who just want an Office machine that fits their budget. Those with a bit more coin will upgrade to the Surface Pro 3. I’m not convinced that long-term use with the Surface 3 will be as enjoyable as it is with the Surface Pro 3, primarily for ergonomic reasons. It's just harder to be productive on a smaller machine. We'll update you after spending more time with it and publishing a full review. Additional testing by Gordon Mah Ung.