Speculation has coalesced around the idea that Microsoft is making a major
shift and unveiling its own branded and designed tablet to compete with the
iPad.
That's following an invitation the company sent out earlier this week to
media to attend a mysterious event Monday afternoon in Los Angeles.
The invitation, which touted a "major Microsoft announcement," provided
no details of what the announcement will be about nor even where in Los
Angeles the event would be held. (That latter detail will be sent to media
Monday morning, the company said.)
In the meantime, reports have surfaced, including in The New York Times,
The Wall Street Journal's AllThingsD, and The Wrap website, that Microsoft is
expected to unveil its own tablet Monday running either Windows 8 -- the next
version of its flagship operating system designed to run on Intel and AMD
processors, or Windows RT, the version of Windows designed to run on ARM-based
processors.
Microsoft spokespeople declined to comment.
If those reports are accurate, it would be the first time Microsoft has
created its own computer hardware running Windows.
Microsoft has always relied on its hardware partners -- HP, Dell,
Samsung, for example -- to create the PCs, laptops and tablets running its
Windows software.
That's a markedly different strategy than the one chosen by its longtime
rival, Apple, which produces both its own hardware and the software running on
it.
Though Microsoft has its own hardware business, that group focuses mainly
on peripherals, such as keyboards, mice and webcams. It also produced the Zune
player, designed to compete with Apple's iPod, which Microsoft pulled the plug
on last year.
The closest Microsoft has gotten to creating its own hardware device
running Windows is with the Xbox, which is reportedly based on a version of
Windows 2000, said Rob Helm, an analyst with the independent research firm
Directions on Microsoft.
"It would be surprising" if Microsoft got into the tablet hardware
business, but it would be understandable if the company felt it was something
it had to do, Helm said.
Microsoft might be feeling pressure to keep the price down, and could use
its huge amount of capital to negotiate lower rates for parts in the supply
chain.
Or Microsoft's aim might be to ensure quality. That, though, is a
double-edged sword, Helm said, citing the Xbox's "red ring of death."
When the Xbox 360 first came out, many customers experienced three red
blinking lights on the console, indicating a general hardware failure.
The problem was so extensive that Microsoft eventually issued an extended
warranty program that cost it at least $1 billion.
On the other hand, the Xbox 360 is now one of Microsoft's biggest
successes, leading the current generation of game consoles in sales for over a
year and making the Xbox brand a hot commodity even as it's being broadened to
encompass movies, music and other general entertainment.
Microsoft might also be taking a lesson from its experiences with Windows
Phone. Despite its desperation to succeed in the smartphone market, Microsoft
didn't get into the hardware business.
Instead it relied on its traditional manufacturing partners, such as
Samsung and HTC, and formed a special relationship with Nokia with the idea of
producing smartphones where the software and hardware worked especially well
together.
The problem with that is Nokia is now in such dire straits that "it may
not be able to deliver what Microsoft had hoped for," Helm said.
"But Microsoft has the capital to prop up what might be an extended
campaign to win in the tablet market," he said.
Microsoft might have given an indication that it was thinking about
producing its own ARM-based devices two years ago when it signed a licensing
agreement enabling it to build processors based on ARM architecture.
"We assumed at the time that that was because Microsoft might want to be
able to contribute to its partners, to build technologies to go into the
products that its partners roll out," Helm said. "But it's conceivable that it
might have decided to do so itself."
