Microsoft Is Said to Plan Preview of Windows Tablet Software

Microsoft Corp. (MSFT) will preview its Windows operating system designed for tablet computers in demonstrations planned for next week, according to three people with knowledge of the company’s plans.

The company will showcase the software’s touch-screen interface running on hardware with an Nvidia Corp. (NVDA) Tegra chip, said the people, who declined to be identified because the plans are confidential. Windows President Steven Sinofsky is scheduled to present at the All Things D conference, while Vice President Steve Guggenheimer will address the Computex show in Taipei.

Microsoft is rushing to adapt Windows to better support devices that can compete with Apple Inc. (AAPL)’s iPad, which dominates the tablet market. The new operating system won’t be out until next year, people familiar with the plans said in March. Still, the company is eager to show it is moving forward, seeking to generate demand among computer makers and chip suppliers.

Nvidia’s Tegra microprocessor is based on the ARM Holdings Plc (ARM) technology that dominates the smartphone market. ARM-based chips are also used in the iPad and tablets that run Google Inc. (GOOG)’s Android operating system.

Mark Martin, a spokesman for Microsoft, declined to comment. The company’s shares rose 48 cents, or 2 percent, to $24.67 at 4 p.m. New York time on the Nasdaq Stock Market. Nvidia gained 46 cents, or 2.5 percent, to $18.82.

Microsoft Chief Executive Officer Steve Ballmer said earlier this week that machines with the new operating system, which he referred to as Windows 8, would be released in 2012.

‘In a Race’

Microsoft, based in Redmond, Washington, later retracted the comments, claiming they were a misstatement. The company is scrambling to expand Windows to computing devices such as phones and tablets, Ballmer said in a speech in New Delhi today.

“We are in a race,” he said. “We are not doing that badly, frankly. We are doing pretty well in that race. But the race is on to continue to push Windows to a variety of new form factors.”

Apple sold 4.69 million iPads in the most recent quarter, for a total of 19.5 million since the device’s April 2010 release. If the next version of Windows does come out on tablets in 2012, Apple will likely be selling its third generation of iPad hardware by then, according to Michael Gartenberg, an analyst at researcher Gartner Inc.

While Microsoft works on the new Windows software, sales in the operating-system business are taking a hit as some consumers choose iPads instead of less-expensive netbook computers that run Windows.

PC Shipments Slip

Consumer personal-computer shipments dropped 8 percent in the quarter, Microsoft Chief Financial Officer Peter Klein said last month. Sales of netbooks plunged 40 percent, partially because of defections to tablet computers, he said.

That helped make last quarter the second in a row in which Windows revenue fell short of analyst estimates.

The demonstration may be a boon to Nvidia, a maker of graphics processors for PCs, which is trying to break into the market for tablet computer chips with Tegra. Most tablets are now built with mobile-phone processors made by Texas Instruments Inc. (TXN), Qualcomm Inc. (QCOM) and Samsung Electronics Co.

Intel Corp. (INTC), whose processors lead in PCs, has been unable to parlay that dominance into design wins in phones and tablets.

Technology website WinRumors reported earlier that Microsoft will demonstrate the tablet software design at All Things D, which is being held in Rancho Palos Verdes, California.

To contact the reporters on this story: Ian King in San Francisco at ianking@bloomberg.net; Dina Bass in Seattle at dbass2@bloomberg.net

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

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