Microsoft may handover coffee table PCs to OEMs

Microsoft might let third party manufacturers build and brand its “Milan” next-generation coffee table PCs.

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Microsoft might let third party manufacturers build and brand its “Milan” next-generation coffee table PCs.

The company this week unveiled the new form factor which has been under development for five-years.

Bringing in hardware OEMs will be necessary for Milan's long-term success, said Matt Rosoff, an analyst with Directions on Microsoft. "To turn it into a real business they have to take a very Microsoft approach and OEM the hardware out," he said.

It will be some time before consumers will want to put in their living rooms the rather bulky prototype Microsoft is demonstrating, though that is what Microsoft wants to happen with Milan, said David Dauod, an analyst with IDC.

"Ultimately, Microsoft's goal is to see the product become something like what used to be a plasma TV," Dauod said. "As awareness grows and prices go down, [it will be more ubiquitous]. Mainstream will become something you will see in the mid- to long-term."

Microsoft said Milan's price will be between £2,500 and £10,000 per unit, which is too expensive for consumers in the near term, Dauod said. Microsoft hasn't disclosed its manufacturing costs, but Dauod guesses that Microsoft does not expect a profit from Milan in the near term.

More importantly, however, the product shows real innovation from Microsoft for the consumer market, the first the company has shown in a long time, he said. Both the Xbox and Zune were me-too products that entered competitive markets. Milan raises the bar for other consumer electronics vendors, Dauod said.

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