Intel Corp will supply chip technology for a new portable media device, under development with Microsoft Corp, which will be unveiled next week, the New York Times reported on Friday.
Citing people close to the two companies, the Times said the device would be a smaller, lighter version of tablet personal computers that allow users to enter text with a digital pen and are tailored for consumer entertainment such as playing music or movies.
The new models would have roughly 8-inch (20.3 cm) screens and sell for about $1,000 each, depending on the functions, the report said. Later versions may be smaller, with 4-inch screens.
The report said the two companies, along with other industry partners, would unveil the new device next week at the CeBit technology trade show in Germany.
Microsoft confirmed on Monday development of a device that has been dubbed "Origami" in a marketing Web site. A video on the site showed young people using the device to sketch pictures, consult a map with satellite technology, listen to music and play video games.
The mysterious marketing campaign (www.origamiproject.com) and subsequent media reports have fuelled speculation of a new product aiming to rival Apple Computer Inc's dominant iPod digital music player or Sony Corp's PlayStation Portable game device.