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Why Would Nokia Want to Build a Windows-Based Tablet?

Tickers in this article: MSFT NOK

NEW YORK (TheStreet) -- If early reports are true, Nokia(NOK) will increase its dependence on Microsoft(MSFT) software by producing a Windows tablet computer.

According to various dispatches and informed guesses, Nokia is shopping for a manufacturer in Asia that will produce a tablet designed to run on Microsoft's new Windows RT operating system, possibly sporting a dual-core Qualcomm(QCOM) processor.

Windows RT is Microsoft's attempt to compete with Apple's(AAPL) iOS and Google's(GOOG) Android operating systems. It is a scaled-down version of the overhauled Windows 8 OS that runs on Intel(INTC) processors. RT is made to operate on devices powered by ARM(ARMH) processors.

Some reports say Nokia is planning on a tablet computer with a 10-inch screen. And that it will announce the device sometime in February, coinciding with the yearly Mobile World Congress in Barcelona.

Early Windows RT devices have not been widely received by the tech press. In our testing of a few different devices, we have found RT's appeal somewhat limited. Its name includes the word Windows but it can only run programs designed for the new platform.

Windows RT has massive competition in the tablet field. In a world where iPads and Android tablets have already garnered fiercely loyal users, devices that run on Microsoft's new software have a huge uphill battle to contend with.

Recently, alternative tablets/operating systems haven't done so well fighting the Apple/Google tablet juggernaut. Ask Hewlett Packard(HPQ) about its offering, which ran on Palm's WebOS. Or Research In Motion's(RIMM) current BlackBerry PlayBook.

Which makes us wonder why Nokia would consider teaming up with Microsoft for a second time. After killing the terrific home-grown MeeGo operating system (as seen in last year's amazing N9 smartphone) to be one of many the companies making Microsoft's Windows OS phones -- we're puzzled by the move.

Really. Why would Nokia agree to make tablets based on yet another Microsoft-based software product after the somewhat lukewarm reception for at least two generations of Windows-based phones?

-- Written by Gary Krakow in New York

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