Can Microsoft Keep Up with Strong Tablet Competition?

A report from Forrester Research says Microsoft (NASDAQ:MSFT) is running out of time to produce a Windows tablet to go up against Apple’s (NASDAQ:AAPL) mighty iPad. A survey from Forrester shows that consumer interest in a tablet running windows has dropped significantly since the beginning of the year. During the first quarter, 46% of consumers said they would prefer a tablet with Windows. Now in the third quarter, only 25% want one.

Microsoft (NASDAQ:MSFT) is already working on its first version of an operating system, Windows 8, that will use the touchscreen. Microsoft has not said when tablets using Windows will be available, but analysts do not foresee it being before the fall of 2012, which gives competitors another year to get even further ahead. Forrester analyst J.P. Gownder states, “Windows 8 look like it’s going to be a good product. It’s just going to be so late to the market.” By the time the Microsoft tablet debuts, an iPad 3 is likely to be out, and Amazon’s (NASDAQ:AMZN) Kindle Fire and Barnes and Noble’s (NYSE:BKS) Nook are likely to gain share due to their affordable pricing along with tons of Google (NASDAQ:GOOG) Android driven tablets that are flooding the market.

Microsoft may be too late in the tablet game right now, but a decade ago they were first when Bill Gates started promoting the idea of the tablet PC. The devices never took off due to their bulkiness and the fact that they relied on a stylus for input.

When the iPad came along it got consumers’ attention and caught Microsoft off guard. There is controversy among executives in the PC industry over iPad’s affect on traditional PC sales, but even Microsoft (NASDAQ:MSFT) agrees that the iPad has taken sales away from netbooks.

Reviews of Windows 8 are positive so far. Its appearance is similar to the “Metro” user interface Microsoft of the Windows 7 phone. Microsoft’s familiarity and its ability to run Office applications will also give it an advantage over the competition.