Microsoft's tablet needs to dazzle

@CNNMoneyTech June 18, 2012: 4:28 PM ET

NEW YORK (CNNMoney) -- Microsoft's long-promised tablet is finally (almost) here.

The company scheduled a last-minute, mysterious event to be held at 3:30 p.m. Pacific Time on Monday in Los Angeles. Microsoft didn't give attendees much notice -- invitations went out Thursday.

The rumor mill has been churning ever since, and the conventional wisdom is that Microsoft will be unveiling its first Windows 8 tablet. Here's the twist: Microsoft (MSFT, Fortune 500) is manufacturing the tablet itself, according to reports in The Wrap and other outlets.

That would be a drastic shift from Microsoft's historic strategy of relying on hardware partners like Dell (DELL, Fortune 500) and HP (HPQ, Fortune 500) to make its actual devices.

If the company does unveil its own Microsoft-branded tablet, there are two ways it can go.

Option A: This is it; here's our iPad killer. Go buy it.

The more likely Option B: Here's a partner-built, Microsoft-branded model of what we'd like Windows tablets to look like. Now go build your own, other hardware folks.

That's the approach Google takes with its Nexus line of Android phones. The company works with outside hardware partners each year to develop a "model" phone showing off all of Android's latest bells-and-whistles. The device is available to consumers, but it's also intended as a guide for other Android smartphone makers.

In either case, Microsoft needs to work quickly.

Two years ago, Microsoft CEO Steve Ballmer promised "urgency" on tablets, calling them Microsoft's "job one." Since then, Apple (AAPL, Fortune 500) has launched three iPads and secured a 59% share of the market. Google (GOOG, Fortune 500) tablets haven't reached iPad levels, but the company's free Android software helped it make inroads.

Option A: If Microsoft goes the "here it is" route, it will be ripping a page from Apple's playbook and taking "If you want something done right, do it yourself" approach.

But Microsoft's hardware track record is mixed. The social-media themed Kin phone was killed off mere weeks after it launched in 2010. Would-be iPod rival Zune was essentially dead on arrival in 2006 (the brand was officially "phased out" a few weeks ago).

Here's the bright spot: the Xbox gaming console, launched in 2001, is one of Microsoft's brightest successes. The Kinect motion-detection add-on, released in 2010, became one of the fastest-selling consumer gadgets in history.

In this case, though, Microsoft doesn't have much room for trial and error. Its efforts to take on Apple and Google in the phone market have been grim: Its Windows Phone partner, Nokia (NOK), recently slashed its sales forecasts and announced plans to lay off 10,000 workers.

Option B: The tablet market is littered with corpses, and Microsoft can't afford a disaster. The safer option is to stick to its time-tested strategy of focusing on software and outsourcing the actual device design to its hardware partners.

Acer and Asus have already previewed devices featuring "Windows RT," the tablet-optimized version of Microsoft's Windows 8 operating system. Dell is also strongly rumored to have one in the works. Samsung is highly likely to be on the list too.

The tablet space offers many cautionary tales. HP shuttered its ill-fated TouchPad after only 49 days on the market. Research in Motion's (RIMM) BlackBerry PlayBook is on life support following sluggish sales and price cutsTo top of page

Market indexes are shown in real time, except for the DJIA, which is delayed by two minutes. All times are ET. Disclaimer Morningstar: © 2014 Morningstar, Inc. All Rights Reserved. Disclaimer The Dow Jones IndexesSM are proprietary to and distributed by Dow Jones & Company, Inc. and have been licensed for use. All content of the Dow Jones IndexesSM © 2014 is proprietary to Dow Jones & Company, Inc. Chicago Mercantile Association. The market data is the property of Chicago Mercantile Exchange Inc. and its licensors. All rights reserved. FactSet Research Systems Inc. 2014. All rights reserved. Most stock quote data provided by BATS.