Microsoft is reportedly set to release a new version of its Windows operating system specifically designed for tablet devices. The new OS, which will run on chips from ARM Holdings, will be unveiled at the Consumer Electronics Show on January, according to the Wall Street Journal.

Nestor Arellano

It might be easy to dismiss that Microsoft has already missed the boat on tablet devices as reports circulate that rival Apple is already preparing an iPad2 . To date, more than 3 million iPads have been sold worldwide while the market is simultaneously being flooded by Android-based iPad alternatives.

However, window of opportunity hasn’t closed for a Microsoft tablet device to compete with Apple’s iPad.

True, Microsoft will have a lot of catching up to do, but I believe the current tablet market is far from mature.

Manufacturers, vendors and app developers are still trying to corner the appropriate mix of form and function that would appeal to users both in the consumer and business sectors.

Remember how Microsoft missed the boat on smartphones? Recently, Windows Phone 7 manufacturers have sold more than 1.5 million devices to retailers and wireless carriers, not customers.

Although, it’s not clear how many people have actually bought a Windows Phone 7 device, early reports indicate that at least Canadian consumers favour Windows Phone 7 over the Android OS.

For a Windows 7 tablet device to beat the iPad, I think Microsoft should play up interoperability with popular Microsoft business tool but at the same time improve touch screen capability and stay away from laptop style interface.

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A device that offers some practical business application couple with the ability for fun computing will probably help Redmond compete against the iPad – think being able to access and edit Excel and PowerPoint documents on the fly as well as play Xbox 360 games.

Forrester Research calls this curated computing “a mode of computing where choice is constrained to deliver less complex but more relevant experiences.”

Microsoft can also work on finding a balance between price and quality. Of course it would help if the Windows 7 tablet is priced lower that the iPad.

However, the product must at least meet or exceed the iPad’s range of features. If Microsoft’s tablet device fails to do this then a lower price would probably not mean anything.