It appears that Microsoft is going all out in its competition with Apple as the tech giant plans to manufacture Windows RT tablets with HTC in a bid to push the sales of its latest operating system.

According to a report by Bloomberg, sources familiar with the matter claim that HTC is working on a 12-inch tablet as well as a 7-inch model with the ability to make phone calls. Both these tablets will run on the Windows operating system.

HTC is believed to debut these products in 2013 after being excluded from the first batch of Windows 8 devices. These HTC tablets will be based on Microsoft’s Windows RT OS, designed for machines with chips using technology from Arm. The report goes on to state that delays in those machines, as well as another version that is powered using Intel chips, mean Microsoft has few devices that can compete with Apple’s iPad.

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HTC to make Windows RT tablets

If HTC does introduce a 7-inch model, it will be the first Windows RT tablet with a smaller form factor that can compete with the smaller tablets such as the Apple iPad mini, the Amazon Kindle Fire and Google Nexus tablet.

These tablets from HTC are tentatively scheduled for release in the third quarter of 2013, however, production details and exact schedules have not been finalised yet.

The report states, “HTC was turned down for participation in the initial round of Windows RT devices, a process Microsoft controlled tightly, people familiar with the matter said in June. As it turned out, most of the devices greenlighted through that program weren’t ready for sale when Windows RT was released in October.”

When the light of this news reached HTC, it had issued a statement in June denying allegations that it is out of the league for developing Windows RT tablets. According to a statement issued by HTC, the brand stated that it will continue working with software giant Microsoft in developing new products. It went on to state, “HTC has sold more than 40 million Windows Phones over the last ten years,” the company said in a statement. “We are committed to future versions of Microsoft's Windows Phone platform more than ever.”

These comments had come in shortly after a report by Bloomberg, which stated that Microsoft’s decision will keep HTC, makers of the first Google Inc. branded smartphone, from participating in the electronics industry’s latest attempt to erode Apple’s lead in the tablet market. The Taiwanese company, whose stock has dropped 68 percent in the past year, was also facing shortages from chipmaker Qualcomm, highlighting the challenge of competing with Apple and Samsung, two companies whose dominance in manufacturing and software are increasingly marginalising smaller rivals like HTC.

The earlier report by Bloomberg, which was published in June, also went on to add that with Apple and Samsung dominating the smartphone shipments, HTC’s percent has dropped 23 percent in the first quarter of this year, while that of Samsung has more than tripled and Apple's has increased to 89 percent. However, as HTC will not be manufacturing Windows RT devices during the first wave, it is expected to be participating in the second round of Windows 8 devices that will be launched next year.

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