Report: Microsoft set to introduce tablet – Austin American

By Nick Wingfield

THE NEW YORK TIMES

Published: 6:08 p.m. Sunday, June 17, 2012

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For decades, Microsoft has made the software that runs the majority of the world’s personal computers, leaving a gang of outside hardware companies to design the machines. Apple, its rival, makes it all.

Microsoft is about to concede that Apple may be on to something.

Today, Microsoft is expected to introduce a tablet computer of its own design that runs a new version of its Windows operating system, according to people with knowledge of Microsoft’s plans who declined to be named discussing confidential matters. It is the first time in the company’s 37-year history that it will offer a computer of its own creation. The device is aimed squarely at Apple’s blockbuster iPad, which has begun to threaten Microsoft’s hegemony in the computer business.

Microsoft’s move is another example of how Apple has demonstrated that the most effective way to create easy-to-use consumer gadgets is by building the whole package — upending the longstanding practice in the technology industry of companies’ devoting their energies to either hardware or software. Google, too, has made a big concession to Apple’s approach, signaling with its acquisition of Motorola Mobility last year that it will also design its own devices.

Microsoft spokesman Frank Shaw declined to comment.

For Microsoft, the decision to make its own tablet would have been almost unthinkable at one time. Microsoft swallowed the PC market in the 1980s and 1990s by letting any hardware maker pay licensing fees to put Windows on its machines. That business was so lucrative for Microsoft that there was no reason for the company to make its own PCs, thus competing for computer sales with its own partners.

The stunning success of Apple, now the most highly valued company in the world, has shown its rivals that they can no longer rely entirely on the business models that were so successful during an earlier era of the tech industry.

For Microsoft, making a tablet is a risky venture. Even with the emerging competition from the iPad, Windows remains one of the greatest franchises the technology industry has known, accounting for $4.6 billion in sales during the most recently reported quarter. Those sales are rooted in Microsoft’s alliance with its hardware partners. The tablet plans could erode the commitment those partners have to Windows since Microsoft will effectively be competing with them for sales.

The News Source: http://www.statesman.com/business/technology/report-microsoft-set-to-introduce-tablet-2400951.html