TORONTO Microsoft Corp will buy Perceptive Pixel Inc, a six-year-old developer of large touchscreen displays whose customers include cable network CNN, chief executive Steve Ballmer said on Monday.
Microsoft also said it plans to launch the latest version of its flagship Windows operating system in October, which Ballmer painted as the most important launch for the Redmond, Washington-based company since Windows 95 almost two decades earlier.
"This is an epic year," Ballmer told more than 16,000 business partners at a conference in Toronto. "It's a year of unparalleled opportunity."
The next 12 months are seen as critical for the software behemoth, which has prepared a multi-pronged assault on the dominance of Apple Inc and Google Inc in the crucial mobile computing space.
The company is placing several major bets over that period: its new Windows 8 operating system, on track for a late October launch; its first "Surface" tablets; a new version of Office; and revamped phone software.
"Not only will every major product enter a new wave, but by the end of the year we will know if Microsoft's Windows 8 bet, which folds tablets and PCs together, will be a boom or bust for the company," said IDC analyst Al Hilwa.
Microsoft said it will be sending Windows 8 to its hardware partners in the first week of August and it will be available more broadly by the end of October.
"This will be the biggest product and services launch year in our company's history, creating massive opportunities for our partners to grow their businesses," Ballmer said in a statement released alongside its annual Worldwide Partner Conference.
Microsoft, which recently agreed to buy online social network Yammer Inc for $1.2 billion in cash, did not disclose the value of its planned acquisition of Perceptive Pixel.
Perceptive Pixel was founded in 2006 and shipped its first multi-touch workstations and large wall displays in 2007, according to its website where it boasted of "transforming the way CNN covered the historic 2008 U.S. Presidential election."
Its founder and chief technology officer, Jeff Han, took to the stage at the conference to show off the wall-sized screen, pinching and zooming on maps, marking up content with a stylus, and swiping between Windows 8 applications.
Microsoft executives also showed off a test device running Windows RT - which runs on the same ARM Holdings Plc designed chips that power most tablet computers - using a Snapdragon chip from Qualcomm Inc, and said it had agreements with a range of other chipmakers including Texas Instruments Inc and Nvidia Corp.
Microsoft shares were 0.8 percent lower at $29.93 in afternoon trading on Nasdaq.
(Additional writing by Sinead Carew; Editing by Gerald E. McCormick and Tim Dobbyn)