Microsoft to take on Apple's tablet with mini Surface PC?

With the hype around Apple's rumoured-for-years tablet PC seemingly cooling off, our attention now turns to Microsoft -- as the company is rumoured to be working on a pre-emptive Apple-tablet killer.

Our ZDNet colleague Mary-Jo Foley reports that Microsoft plans to create a tablet, which is based in part on the technology behind the company's Surface table project and has been developed under Bond-villain code names such as 'Oahu' and 'Alchemy Ventures'. In charge of the project is chief experience officer J Allard, who was the main man behind the Xbox brand for several years.

But don't expect it any time soon. Mary-Jo says she "wouldn't be surprised if Microsoft is waiting for Apple to show its hand before trotting out its revamped tablet."

A key difference between a Microsoft tablet and an Apple one would be that Microsoft would design the basic spec, and let hardware partners build the actual devices -- allowing MS to sit back and enjoy revenue from Zune-like subscription services, rather than be in the hardware-manufacturing business. Judging from the Xbox 360's high failure rate, that might not be the worst idea.