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Hmmm...now this is something to keep your eye on...

Microsoft Corp. (MSFT) unveiled its own Windows-powered tablet computer called Surface, altering its strategy of focusing on software and relying on partners to make the machines in a renewed attempt to take on Apple Inc. (AAPL)’s iPad.

The tablet has a 10.6-inch display and will run the new version of Microsoft’s operating system, Chief Executive Officer Steve Ballmer said at an event yesterday at Milk Studios in Los Angeles. The device’s cover serves as a full keyboard with a track pad. Surface will be available later this year.

Oh oh.

Rumors are that the ARM-powered versions will also come with Office -- from the factory -- included in the price.

The various tablet "solutions" have always suffered from the lack of a keyboard and zero expansion capability. Surface solves both by having a USB port and a build-in keyboard -- albeit not a "full-stroke" one. To get both it sacrifices little -- or nothing -- in form-factor.

For the corporate user who has been looking at the iPad as a "solution device" this ought to bring a full, hard stop here and now until Surface is released. The commonality of Office and applications developed for the corporate world, along with bi-modal (touch-screen and keyboard/tracksurface) input addresses essentially all of the complaints that the "tablet" haters have had (myself included) along with being able to run existing Windows applications (at least for the Intel-based versions.)

Microsoft has a checkered past when it comes to hardware, including some spectacular flops (Zune anyone?) but when it gets it right (e.g. Xbox) it sells a ton of equipment. Further, it has the inherent subsidy available that Apple does when bundling hardware and software into one offering.

Things just got a whole lot more interesting in the tablet space. I've tried them all thus far -- from the Playbook to the Android devices to the iPad -- and I'm not all that impressed with any of them. Playbook has the best browser (by far) and the iPad has the best application base (by far) with Android simply missing the mark in all regards -- many Android apps do not run properly in the larger form-factor and despite Google's (GOOG) protests the webkit browser just plain sucks as soon as you need to enter anything into a web page. In addition despite all the oooohhhhhhs and ahhhhhs for the thin form factor I simply can't get away from the need for a keyboard in what I do, and while bluetooth offers a solution carrying two things destroys the argument for the tablet in the first place -- my Lenovo X220 is not much larger or heavier than the combination and it's one piece, not to mention that it has a monstrous amount of storage (500gb) in both SSD and rotating media, besides being able to read media cards and connect to USB devices. Oh, and in addition it has a real processor with actual power -- so I can do real work on it too.

This is a development to watch.

Source: Microsoft Attacks Apple