Microsoft may launch its own tablet along with its Windows 8 in late 2012, in what would be a significant move for the software giant which is yet to make a mark in the smartphone and tablet market.

California-based Microsoft's new tablet may have chips from Texas Instruments, while the device's other components would be manufactured by Original Equipment Manufacturers (OEM) and Original Device Manufacturers (ODM) based in Taiwan, DigiTimes reported citing sources from the upstream supply chain.

Microsoft, which may be taking a leaf from the book of its rivals Apple and Android, is still considering launching an own-brand tablet PC and is proceeding on a low profile, the sources said.

Apple is developing its own tablets (iPad) as well as providing its own operating system iOS, thereby providing a complete package. Meanwhile, Google has also been working aggressively on developing operating systems and establishing its own supply chain coalition.

As Apple and Google are running away with the market share in the mobile computing space, Microsoft cannot stay out of the tablet market any longer. Recently, Microsoft previewed its much-awaited Windows 8 which could best be described as one OS to rule all devices -- tablets, notebooks and desktops alike.

Tablets Killing PCs?

At WWDC, Apple said it sold 25 million iPads in just 14 months - an indication that tablets are cannibalizing PCs where Microsoft rules the roost.

The latest reports from IDC and Gartner underscore this.

Worldwide PC unit growth is projected to be weaker in 2011. Gartner expects PC shipments to grow 9.3 percent in 2011, reaching 385 million units. This is slightly lower than Gartner's previous projection of 10.5 percent growth for this year.

Worldwide PC shipments are now expected to grow by just 4.2 percent in 2011, down from a February forecast of 7.1 percent, according to the International Data Corporation (IDC). In addition, first quarter 2011 PC shipments were down 1.1 percent from the prior year, IDC said.

Consumer mobile PCs are no longer driving growth, because of sharply declining consumer interest in mini-notebooks. Mini-notebook shipments have noticeably contracted over the last several quarters, and this has substantially reduced overall mobile PC unit growth, said Ranjit Atwal, research director at Gartner. Media tablets, such as the iPad, have also impacted mobile growth, but more because they have caused consumers to delay new mobile PC purchases rather than directly replacing aging mobile PCs with media tablets.

So it is a case of better late or never for Microsoft, which should enter the tablet market with a compelling device, supporting software, apps and cloud services. In short, a complete ecosystem.