Barnes & Noble deal hints at possible new Microsoft tablet today

May agreement offers clues to e-reader or tablet co-produced by partners

Rumors that Microsoft may unveil its own e-reader or tablet later today would be confirmation of speculation that dates back more than a month, not just to last week.

Monday afternoon, Microsoft will hold a hastily-called press conference in Los Angeles, that may, depending on the buzz of the hour, center on an iPad-style tablet or a smaller device designed primarily for e-reading, akin to Amazon's Kindle Fire.

The former was the initial -- and in some quarters -- still the most likely focus of the mysterious announcement. Under that scenario, Microsoft will reveal a tablet powered by Windows RT.

In the second, more recently-argued scenario, the device will be a tablet or e-reader co-produced by Microsoft and bookseller Barnes & Noble.

According to TechCrunch, which did not cite its sources, the device will likely serve as a rival to the Kindle Fire rather the iPad, and will emphasize entertainment, possibly offering Xbox Live media content streaming.

If accurate, the device, whether tablet or e-reader, may have been revealed seven weeks ago when Microsoft and Barnes & Noble announced their partnership. As part of that agreement, Microsoft invested $300 million in the bookseller's new digital content subsidiary, dubbed only as "NewCo," and promised at least another $305 million in payments over the next five years.

In an April 30 filing with the U.S. Securities & Exchange Commission, Barnes & Noble noted that Microsoft might create something called "Microsoft Reader," and if it did, pledged that the device or software -- it wasn't clear which Reader would be -- could access the new digital content market NewCo would build.

"If Microsoft creates a reader, Microsoft may include an interface to the NewCo Store in that reader and may surface in that reader all Content purchased by customers from the NewCo Store," the filing stated.

At the time, analysts said that the partnership could result in a Windows tablet or e-reader, but predicted that digital college textbooks, not entertainment, seemed like the best opportunity.

The same commercial agreement also requires NewCo to develop a Windows Phone e-reader app as well as one for a "Windows device," which was defined as a "Windows-Based PC or a Windows Phone."

The latter is to be a Metro app, the new type of Windows software that runs on both Windows RT, the offshoot that works only on hardware powered by ARM processors, and on the more traditional Windows 8.

Friday's scuttlebutt claimed that today Microsoft would reveal a company-branded Windows RT tablet, while others voting for the less powerful e-reader option have said it could be powered by the upcoming Windows Phone 8.

In all cases, the Barnes and Noble-Microsoft partnership has the bases covered: The former is compelled to crank out software for both Windows Phone 8 and Windows 8/RT operating systems.

The software, in fact, is destined only for upcoming -- not current -- Microsoft OSes, as definitions in the agreement made clear.

"Windows OS' means the Windows 8 (both x86 and ARM) client operating system," the agreement read. "[And] 'Windows Phone Software' means ... the successor to Microsoft's Windows Phone 7.5 operating system software for mobile phones that is currently code-named 'Apollo.'"

Microsoft will reportedly show Windows Phone 8 to developers at a two-day event in San Francisco that kicks off Wednesday, yet another clue used to bolster bets that Microsoft and Barnes & Noble will unwrap a device Monday, then be able to pitch developers on creating apps for it later this week.

The agreement between the two firms offered other clues as well.

The assets transferred from Barnes & Noble to NewCo included both its Nook device division and its online bookstore, putting any new tablet or e-reader -- whether Microsoft-branded or not -- firmly within the venture's domain, and thus open to collaboration.

Additionally, Barnes & Noble promised to make all efforts to insure that its subsidiaries or affiliates do "not compete, with NewCo in the business of selling or making available Reading Content or similar e-reading content, e-reader software or e-reader devices."

That leaves NewCo -- read Microsoft and Barnes & Noble -- as the sole creator of future e-reading devices that leverage the bookseller's content mart.

But while Barnes & Noble has contributed its Nook and online store to NewCo, by the agreement, Microsoft has put little except its money into the kitty. A joint tablet, however, could change that.

Microsoft does have assets it could supply NewCo, notably the streaming content available through its Xbox Live service, which includes everything from ESPN and HBO Go to Netflix and Hulu Plus.

That contribution could be in the agreement, which is heavily redacted. Under the section titled "Microsoft Responsibilities," which among other things requires the company to assist in the Windows app's development and the Windows Phone app's certification, one of the seven items is redacted.

Barnes & Noble's Nook Tablet, which launched late last year, is powered by Google's Android mobile operating system, which also forms the foundation of Amazon's Kindle Fire. If Microsoft and Barnes & Noble do unveil a Windows -- whether Windows RT- or Windows Phone-based -- e-reader or tablet, it would be the first such device to use the Redmond, Wash. company's new platforms.

The Microsoft press conference is to start at 3:30 p.m. PT today.

Gregg Keizer covers Microsoft, security issues, Apple, Web browsers and general technology breaking news for Computerworld. Follow Gregg on Twitter at @gkeizer, or subscribe to Gregg's RSS feed . His e-mail address is

Copyright © 2012 IDG Communications, Inc.

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