Microsoft stirs buzz on possible iPad challenger

Microsoft sparked speculation that it may be developing a product to challenge the Apple iPad after a mysterious announced on Monday, June 18, 2012.

LOS ANGELES—Microsoft has set the tech world buzzing with a mysterious announcement Monday, which sparked speculation that the software giant may be developing a product to challenge the Apple iPad.

The announcement by the world’s biggest software firm was shrouded in secrecy, and fueled a series of reports, some of which were contradictory.

Invitations late last week said, “This will be a major Microsoft announcement – you will not want to miss it.”

Even the location, somewhere in Los Angeles, was kept under wraps, with the precise venue to be sent to journalists on Monday.

Last week, the entertainment website The Wrap said it had learned Microsoft would unveil its own branded tablet powered by Windows in a head-on challenge to Apple.

The technology news site TechCrunch said the announcement would not involve a device with the upcoming Microsoft 8 operating system, but a co-branded tablet with Barnes & Noble, the struggling bookseller and maker of the Nook tablet.

The device, according to TechCrunch, could allow consumers to link to the Microsoft Xbox 360 gaming console for streaming movies and other entertainment.

Microsoft in April announced a $300-million investment in a new Barnes & Noble subsidiary that includes the Nook business.

But the business website Benzinga said Barnes & Noble indicated it was not part of the Microsoft announcement.

The brokerage firm Canaccord said “sources close to the matter” indicate Microsoft would unveil a tablet running the next version of Windows under its own brand, departing from its strategy of partnering with computer makers.

“Microsoft has been working with computer makers in the production of the tablets, looking to win share of the tablet market from the dominant iPad,” the brokerage said in a note to clients.

“By producing its own tablet, it would have more control over the hardware that runs its programs, like Apple … (but) could hurt Microsoft’s relationship with some PC partners who have been developing Windows 8 compatible tablets themselves.”

Some others speculated Microsoft might announce a deal to buy online video service Hulu and weave it into the Xbox Live online entertainment service linked to the Redmond, Washington-based company’s leading Xbox 360 videogame consoles.

The fact that the press event will be held at a yet-to-be disclosed venue in Los Angeles hinted heavily that entertainment industry content would be in the spotlight.

“It’s in L.A., so they are going to talk about media,” said independent Silicon Valley analyst Rob Enderle.

“It could be about hardware, but after the Kin failure and the Zune failure I can’t picture the person at Microsoft who has the balls to pitch a Microsoft tablet.”

Kin was a youth-oriented mobile phone from Microsoft that was pulled from the market after just weeks, while Zune was the longtime Apple rival’s now-abandoned MP3 device that unsuccessfully challenged the iPod.

Douglas McIntyre of 24/7 Wall Street said that despite the failures, Microsoft has the resources to produce a winner, and cited the success of the Xbox gaming platform.

“The market may have underestimated the resolve of Microsoft CEO Steve Ballmer,” he said.

“He invested billions of dollars to best incumbents Sony and Nintendo in the game console market.”

Some analysts were speculating about an early release of Windows RT, the Microsoft operating system to power tablets or other mobile devices running on ARM chips, which allow mobile devices to run more efficiently.

Microsoft earlier this month stepped up its quest to be at the heart of home entertainment by synching Xbox 360 videogame consoles to smartphones and tablets while adding more blockbuster content.

Microsoft introduced Xbox SmartGlass software for linking the consoles to iPhones, iPads, Android-powered gadgets and, of course, devices powered by the technology titan’s new Windows 8 operating system.