The hardware arena is becoming an increasingly crowded space and that's a good thing for consumers who want more choices. Not that long ago, tech giants used to sit on the sidelines and leave the gadget making biz to Apple and the iPhone maker happily exploited the opportunity, churning out music players, cell phones, wireless appliances, set-top boxes, tablets and computers.

But things have changed quite a bit. Nowadays, everyone and their brother wants to build hardware, software and services in a vertically integrated fashion that made Apple a popular choice among the consumers. Amazon now sells tablets and e-readers and is allegedly building a phone. Google has become a handset vendor thanks to its pricey purchase of Motorola Mobility. And with a recent trifecta of Nexus devices, the search monster has become a hardware force to be reckoned with. But what's Microsoft up to?