Microsoft Seeks Niche For New Device

Somewhere between a cell phone and a laptop, the device can be used as a GPS navigation system, play movies and music, and connect to the Internet.
Microsoft hopes the purse-size device it will unveil Thursday at a trade show in Germany will be the next big thing in small computers.

CBS News correspondent John Blackstone got a sneak peak at the device, code-named Origami, from Intel, the company that's making the chips for the new machine.

Brad Graff, Intel's director of marketing, calls the device an ultra-portable computer — somewhere between a cell phone and a laptop. It has a seven-inch screen, can be used as a GPS navigation system, plays movies and music — and, of course, it connects to the Internet.

"You've got a thumb keyboard, so you can send out some e-mail" he says, "and when done you close it up, you are back to where you started."

But in a world where people already carry BlackBerrys, cell phones, iPods and laptops, who needs another device that does many of the same things. Graff says early research turned up a surprise.

"One category we didn't expect is soccer moms," he says. "They would drop of their kids at the game, do some shopping, run an errand and have some dead time. We deployed these devices and we found they loved it. They could get real work done in between things."

But similar "tablet" computers have been tried before and failed. Remember the Apple Newton? You're not alone if you don't. Analysts say the difference now is that there's growing demand from users who want to stay connected and have entertainment at their fingertips.

Early models priced at about $1,000 should be on sale in a few weeks. But the industry is aiming at a $500 mass-market price within a year.