Microsoft is making a “major” announcement on Monday — suspected to be the revelation of a brand-new tablet.

What, exactly, that tablet will be remains up in the air. The company’s push toward Windows 8 has led to speculation that the company will show off its Windows RT tablets. But a report from TechCrunch has thrown some weight behind the ideas first floated by ZDNet’s Mary Jo Foley, who guessed Friday that the tablet would be a souped-up reader made in cooperation with Barnes and Noble — a device more like Amazon’s Kindle Fire.

TechCrunch’s unnamed sources say that is the case, and that the device may be the first non-Xbox device to stream Xbox Live services.

Many tech industry observers believe Microsoft badly needs a strong tablet strategy, and diversifying its price points with a powerful e-reader wouldn’t be a bad way to compete for the lower end of the market -- especially if it can pull in the multimedia services it offers on Xbox Live.

But All Things Digital’s Ina Fried seems convinced that the company will be launching its own brand of tablets Monday, which would put it into much more direct competition with Apple than with Amazon.

“Obviously, Microsoft could bring both Windows and Office to the device. But, the company also has its Xbox gaming abilities, plenty of licensing deals with Hollywood and the music labels as well as the Barnes & Noble partnership it stuck when settling a legal battle earlier this year,” Fried wrote.

Such a move, she said, would radically redefine how Microsoft operates its business: moving on from software into a major hardware push.

There are plenty of pros and cons to consider.

IDC analyst Al Hilwa said in a note to media that having Microsoft compete with other companies to make Windows RT tablets could discourage growth in the space, since, as he puts it, “Who wants to compete with the OS owner?”

On the other hand, making RT tablets itself would let the company be more flexible with the devices’ designs and possibly bring the price down because Microsoft won’t have to pay for licensing on programs such as Office.

To succeed, Hilwa said, Microsoft RT tablets have to be high quality, competitive with the iPad on price, and integrated with plenty of services such as Netflix and Skype. Those aspects, combined with Flash support, Office Apps and compatability with Windows 8 Metro apps could make Microsoft’s tablet a real competitor, he said.

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