Microsoft-branded, Barnes & Noble built tablet 'makes sense,' analyst says

Giving new tablet Xbox live functionality gives it some unique value

A Microsoft-branded tablet made by Barnes & Noble makes sense if the tablet is focused on the same market as the $200 Kindle Fire, analysts said Monday.

Microsoft is set to divulge full details at an event in Los Angeles Monday afternoon. Informed sources have filled in some details in various reports, including that partner Barnes & Noble would make the Microsoft-branded device, possibly giving it Xbox-like capabilities. "If Microsoft concentrates on the same market as Kindle Fire and not a general-purpose tablet market, then this [Barnes & Noble partnership for a branded tablet] makes sense," said Jack Gold, an analyst at J. Gold Associates.

Microsoft could easily subsidize the cost of the tablet, making the money back with revenues from services, e-book and app sales and ads sold for Bing search, analysts said. "Barnes & Noble does have a pretty significant installed base from which to market and build Windows 8 credibility," Gold said.

"Add to this tablet an ability to play online games through the Xbox network, and you could have a very interesting play for a Windows 8 tablet running RT or an optimized version of RT, more likely," Gold said.

But will this tablet sell?

"It won't sell in huge volumes, but selling a few million devices when you are starting from zero isn't bad," Gold added. "And the continuing revenue stream for content is good as well."

Gold said he's interested to see what kind of ARM chip is inside. "It's likely that this device will have a more modest chip to keep battery life long, since you don't need all that horsepower for content consumption and even gaming, given that most of the gaming would be via the Web," he said.

Much of the focus on Windows RT tablets has been on higher-priced, quad-core ARM chips from Nvidia and Qualcomm. Nvidia has provided such a chip for the Asus Windows RT tablet shown recently at Computex.

If Microsoft modifies its branded Windows RT tablet, it was unclear the device would be compatible with other tablets running Windows RT, analysts said. Could it be purpose-built, such as an e-reader or a gaming device, with restrictions on its use? That seems likely, three analysts said.

Even though the tablet hasn't been officialy announced, one analyst was less optimistic than Gold and said it would be hard for Microsoft to make much of a difference in the market.

"The new tablet will have to offer something uniquely different to take a chunk of share," said Zeus Kerravala, an analyst at ZK Research. "And I don't believe that's there," based on reports of what will be unveiled.

If there is some kind of Xbox experience in the new tablet, Kerravala doubted that would help sales much. "The Xbox audience is not a good group for tablets," he said. "Gamers want a 65-inchTV, not a mobile device."

Historically, gamers have "never been great for mobile devices," Kerravala added.

Matt Hamblen covers mobile and wireless, smartphones and other handhelds, and wireless networking for Computerworld. Follow Matt on Twitter at @matthamblen or subscribe to Matt's RSS feed. His email address is mhamblen@computerworld.com.

See more by Matt Hamblen on Computerworld.com.

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