Despite previously saying that it would only approach tablets through its hardware partners, Microsoft has reportedly decided it can no longer stay out of the lucrative market.
The company is staying tight-lipped on its efforts, but has scheduled an event on Monday (June 18) in Los Angeles, where it will make a "major" announcement.
All Things D claims that the event will see the announcement of a Microsoft tablet, after sources claimed that the company has concluded that it needs to control both the hardware and software to compete with its rivals.
The website's sources say the tablet range could feature ARM-based processors, as well as models running "traditional PC processors".
Technology site The Warp also reported yesterday evening that Microsoft will manufacture the devices itself.
It is expected that the tablet would run the new touch-enabled Windows 8 operating system, launching later in the year.
The move makes sense for Microsoft in terms of matching Apple's overall control of the iPad ecosystem, but it also presents the firm with a problem.
Microsoft has always previously avoided making its own computers, instead generating huge revenues from licensing Windows and Office to manufacturers.
The firm has been busy encouraging other firms, such Dell and Acer, to develop tablets running Windows 8 and Windows RT (ARM-based version), but could now be readying its own competitor product.
This may push the other manufacturers to focus on Google Android, although they face similar issues on that score, as Google will launch its own Android-powered tablet this summer.
After its Zune device lost out in the MP3 player market to Apple's iPod, Microsoft could be keen to reign in Apple's dominance in the tablet space.
The Wrap says that Microsoft's tablet device will pitch to the higher-end of the market, challenging Apple's iPad.
But ZDNet's claims that the firm will actually take on the budget end, creating a seven-inch display tablet similar to Amazon's popular Kindle Fire.
Google is also speculated to be preparing to target this space with a cheap tablet, but then make money by selling digital content to users.
ZDNet also says that Microsoft's tablet might not be Windows 8 embedded, but instead run a version of the Windows Phone mobile operating system.
Also next week, Microsoft is thought to be planning to announce the eighth version of Windows Phone smartphones, codenamed Apollo, offering a variety of new features.