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Microsoft Said to Debut Its Own Windows Tablet Next Week

Friday, 15 Jun 2012 04:54 PM

(Updates with analyst’s comment in fourth paragraph.)

June 15 (Bloomberg) -- Microsoft Corp. will announce plans to sell a tablet running the next version of the Windows operating system under its own brand, a major departure from its strategy of partnering with computer makers, according to a person familiar with the plans.

The Redmond, Washington-based company may demonstrate the device at an event scheduled in Los Angeles on June 18, said the person, who asked not to be identified because the plans haven’t been made public. The company has said it aims to release the new Windows 8 operating system in time for the holiday season.

Microsoft has been working with personal-computer makers to produce Windows 8 tablets, designed to win back consumers who have shunned Windows machines in favor of Apple Inc.’s iPad. The world’s largest software maker may be taking steps to exert more control over the hardware that runs its programs -- as Apple does -- in order to mount a more successful challenge.

“If Microsoft wants to control the entire user experience and the entire quality of their products, they have to build their own hardware,” said Michael Cherry, an analyst at Directions on Microsoft, a Kirkland, Washington-based market- research firm.

Frank Shaw, a spokesman for Microsoft, declined to comment.

Software Focus

Since the release of International Business Machines Corp.’s first PC in 1981, Microsoft has focused on software for the machines and left design and branding to hardware makers. While the company has in the past decade played a larger role in working with some PC makers on design, it has shied away from developing the machines and selling them under the Microsoft brand.

The shift in strategy has the potential to sour Microsoft’s relationship with some PC partners, many of which have been investing to develop Windows 8 tablets themselves and may not want to compete directly with Microsoft.

The change may also radically alter profitability in the Windows business, which now sells just software with operating margins of more than 60 percent. By comparison, computer maker Dell Inc.’s operating margin for the most recent fiscal year was about 7 percent.

The company’s tablet plans were previously reported by entertainment website The Wrap and the All Things D blog.

--Editors: Lisa Rapaport, Jillian Ward

To contact the reporters on this story: Dina Bass in Seattle at dbass2@bloomberg.net; Kathleen Chaykowski in New York at kchaykowski@bloomberg.net

To contact the editor responsible for this story: Tom Giles at tgiles5@bloomberg.net

© Copyright 2017 Bloomberg News. All rights reserved.

   
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