Microsoft's Next Tablet Could Include Qualcomm Chips - Advanced Micro Devices (NASDAQ:AMD), Dell Technolo

With the original Surface approaching its one-year anniversary, rumors for the follow-up -- the presumably titled Surface 2 -- are beginning to heat up.

While

Microsoft

(NASDAQ:

MSFT

) chose not to talk about Surface (or the video game-specific tablet it is rumored to be developing) during its press conference last week, details are beginning to trickle out. According to

Bloomberg

, the Windows RT-based Surface will be updated with

Qualcomm's

(NASDAQ:

QCOM

) Snapdragon processors. Snapdragon technology has already made its way into several Android-based tablets, including

Sony's

(NYSE:

SNE

) Xperia Tablet Z, Samsung's Galaxy Tab 8.9 and Galaxy Tab 2 10.1 LTE, and the

T-Mobile

(NYSE:

TMUS

) Springboard. Only one Windows RT-based tablet,

Dell's

(NASDAQ:

DELL

) XPS 10, currently uses a Snapdragon processor. Qualcomm

claims

that Snapdragon provides longer battery life, faster charging, improved multi-tasking, more 3D effects, smoother video games, superior Web surfing and full HD video. Snapdragon-powered tablets can also send full HD video to an HDTV without any slowdown. While Qualcomm is expected to be added to the list of suppliers,

NVIDIA

(NASDAQ:

NVDA

) -- which provided its Tegra 3 processor for the first Surface RT -- will still be a part of the tablet's development. In fact, one of Bloomberg's sources stated that NVIDIA will "continue as a supplier for some versions." This indicates that Microsoft may be planning to develop more than two Surface tablets for release in 2013. One of them could be the long-rumored seven-inch gaming tablet, which would likely be designed to launch alongside Xbox One. While it might be difficult to imagine that consumers will be willing to spend $499 on a new console, $59.99 on new games, $59.99 on new controllers

and

$200+ on an Xbox-themed tablet, the market is large enough to cash in. An Xbox tablet would also give Microsoft the chance to reach gamers who may have been turned off by the

various restrictions

that are associated with Xbox One. While NVIDIA used to be a core supplier of chips for the game industry,

AMD

(NYSE:

AMD

) has taken over that market, particularly in the area of console manufacturing. All three of the next-gen machines use processors that were built by AMD. Qualcomm has been promoting the Snapdragon to manufacturers who wish to provide a high-end gaming experience, so it is possible that Microsoft will use Qualcomm's chips for the Xbox tablet -- if one actually exists. In any case, it should be interesting to see how Microsoft plans to expand its tablet lineup this year.

Louis Bedigian is the Senior Tech Analyst and Features Writer of Benzinga. You can reach him at 248-636-1322 or louis(at)benzingapro(dot)com. Follow him @LouisBedigianBZ

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