Talk of Microsoft tablet resurfaces

SEATTLE | Fri Jun 15, 2012 7:42pm EDT

SEATTLE (Reuters) - Microsoft Corp (MSFT.O) is gearing up to unveil its own tablet to boost its new Windows 8 operating system and counter Apple Inc's (AAPL.O) hot-selling iPad, according to media reports on Friday.

Such an effort, which the company has not confirmed, would be a departure from its usual focus on software and potentially throw Microsoft into direct competition with its closest hardware partners such as Samsung Electronics Co Ltd (005930.KS) and Hewlett-Packard Co (HPQ.N).

The world's largest software company has invited media to a "major" announcement in Los Angeles on Monday afternoon, but has not provided any details.

In the absence of information, talk is swirling that Microsoft will introduce its own tablet, according to anonymously sourced reports in the New York Times and the AllThingsD tech blog. Microsoft declined comment on the subject and those reports.

It is not the first time such talk has surfaced, as Microsoft looks for a way to make an impact with its new tablet-friendly Windows 8 operating system and put the best product it can in the market to counter Apple's iPad.

Apple, which makes both hardware and software for greater control over the performance of the final product, has revolutionized mobile markets with its smooth, seamless phones and tablets. Rival Google Inc (GOOG.O) may experiment with a similar approach after buying phone maker Motorola Mobility this year.

"Anything is possible if they don't feel their partners are doing it right," said Michael Silver, an analyst at tech research firm Gartner. "But it's hard to compete with companies that sell your stuff and still have a great relationship with them."

Other analysts suggested an own-branded tablet may be chiefly aimed at kick-starting the market for Windows tablets working on ARM Holdings Plc (ARM.L) microprocessors - a new venture for Microsoft, which has traditionally relied on Intel Corp (INTC.O) chips.

Microsoft charges hardware makers $50 or more to incorporate its software in machines and analysts suggest that hardware makers are struggling to produce tablets at a low enough price to challenge the iPad. By making its own tablets, Microsoft would presumably use its software for free, bringing down the overall price.

"It suggests to me that they've struggled to get OEMs (hardware makers) on board to bring the prices down, so they feel they have to subsidize these products to get them out of the door, at least in the first iteration," said Al Hilwa, an analyst at tech research firm IDC.

Making its own hardware for such an important product would be a departure for Microsoft, which based its success on licensing its software to other manufacturers, stressing the importance of "partners" and the Windows "ecosystem."

When it has ventured into hardware, the Redmond, Washington-based company has a mixed record.

Apart from keyboards and mice, the Xbox game console was its first foray into major manufacturing. That is now a successful business, but only after billions of dollars of investment and overcoming problems with high rates of faulty units - a problem which was nicknamed the "red ring of death" by gamers.

The company's Microsoft-branded Zune music player, a late rival to Apple's iPod, was not a success and its unpopular Kin phone was taken off the market shortly after introduction.

Microsoft has tried hard to generate the type of excitement Apple gets for its secretive product launches, but usually disappoints. Talk was rife at the Consumer Electronics Show in 2010 that Microsoft would pre-empt Apple's iPad with a slate of its own devising, but it never materialized.

The company killed off a two-screen, slate-style prototype called Courier later that year, saying the technology might emerge in another form later on.

(Reporting By Bill Rigby; editing by Andre Grenon)

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