Toshiba To Take On IPads With Windows 8 Tablets

Acer Inc., Toshiba Corp. (6502) and Asustek Computer Inc. (2357) will unveil tablets running Microsoft Corp.'s Windows 8 operating system next week, people with knowledge of the matter said, challenging the dominance of Apple Inc. (AAPL)'s iPad.

Acer will display a tablet based on Microsoft's new software at the Computex show in Taipei, while Toshiba will show a tablet and a notebook-type device, said the people, who asked not to be identified because the plans haven't been made public. Asustek will present tablets with detachable keyboards similar to its current Transformer model, the people said.

The annual Computex show provides a forum for the computer industry to tout its wares before the typical increase in second-half demand. Computer makers allied with Microsoft (MSFT) will use this year's event to highlight a long-awaited response to the iPad and machines that run Google Inc.'s Android operating system, which together have 91 percent of the tablet market.

Windows 8 also will be the first version of the software that will work on processors using ARM Holdings Plc (ARM) technology, a type of chip made by Qualcomm Inc. (QCOM), Texas Instruments Inc. (TXN) and Nvidia Corp. that dominates the phone industry. ARM-based chips, manufactured by Samsung Electronics Co., power the iPad.

The use of ARM-based chips marks a snub for Intel Corp. (INTC), which along with Advanced Micro Devices Inc. (AMD) has been the exclusive provider of chips for Windows machines. Intel, which has more than 80 percent of the PC-chip market, hasn't been able to parlay that dominance into market share in phones or tablets.

Asustek will demonstrate tablets based on an Nvidia ARM- based chip called Tegra and another powered by an Intel chip, the people said. The Tegra-based device, which is similar to the one that will go on sale, will be displayed publicly, setting up an opportunity for direct comparisons between a Windows computer running on ARM and one using Intel technology.

Tablet Sales
The Acer (2353) tablet is built around an Intel chip, while Toshiba is using Texas Instruments for its processors.

Microsoft plans to show off Asustek devices in a presentation by Vice President Steven Guggenheimer at the show on June 6, said one person familiar with the company's plans.

The show provides the first airing of tablet hardware that Microsoft intends to use to narrow Apple's lead in the tablet market. Sales of Windows PCs to consumers have slumped as buyers opt for tablets, making it critical for Microsoft to offer a compelling option in that category.

The tablet market is poised to grow 70 percent a year on average through 2015, according to estimates from Evercore Group LLC. Traditional notebooks will have an average annual growth rate of 8 percent. Apple Chief Executive Officer Tim Cook predicted in January and reiterated this week that tablets will surpass PCs in terms of units sold.

Windows 8
The June 5-9 Taipei show will highlight a limited number of ARM-based devices as Microsoft seeks to ensure that when Windows 8 is released later this year, the products will stand up to comparisons with the iPad. The limited debut will be followed by a second wave of computer and phone makers lined up for next year, two of the people said.

Qualcomm, the world's largest maker of mobile-phone chips, will demonstrate a test device running Windows 8 based on its Snapdragon processor, said a person familiar with its plans. The company is committed to having customer devices in the market when the new version of the software goes on sale, the person said.

By: Ian King, Dina Bass and Tim Culpan