What makes the tablet explosion so terrifying for Microsoft is that they don't have control of a market with exponential growth. When PC's were on a similar growth curve, Microsoft swallowed up the entire market and ended up having to be restrained by the Department of Justice.
That may be why Microsoft decided today to announce their own branded tablets, bypassing their usual hardware partners. This sends a signal that Microsoft wants to set the tone for Windows 8 tablets, and they aren't going to force consumers to sift through the various tablets already announced for the launch of Windows 8.
Ars Technica has the details on the announcement, including some great pictures. Tech journalists saw the ARM powered, low end tablet coming. This runs the Windows RT version that has gotten some ink for being stripped down. On the other hand, very few people thought that Microsoft would announce an Intel powered tablet competitor to Ultrabooks. Price, date, and battery life have all yet to be announced. Curiously, there's no mention of a data plan, either.
To be fair, Microsoft isn't a company to underestimate. They came into video games as an underdog, and they managed to become an important force, and out performed Sony. It will be interesting to see what Microsoft does in this market when they control the hardware.