The Redmond-based company may demonstrate the device at an event scheduled in Los Angeles on Monday, 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'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 — 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-based market-research firm.
Frank Shaw, a spokesman for Microsoft, declined to comment.
Since the release of IBM 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.
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