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As rumors unfurl about a new gadget upcoming from Microsoft, the company’s Origami Project is starting to take shape as a very small tablet computer, one perhaps affordable enough to appeal to mainstream consumers.

The concept, which Microsoft plans to detail next month, is built on top of the Windows XP operating system but aims to be a new kind of device, rather than a replacement for existing PCs, according to sources familiar with the effort. With a screen bigger than that of a handheld but smaller than a notebook PC screen, Origami devices won’t fit in the pocket, but they’ll make it into purses and even the smallest of backpacks, sources said.

Microsoft’s goal is to create a blueprint for devices that could sell for $600 or less, although the actual prices will depend greatly on what manufacturers decide to include. Origami is capable of supporting features like GPS, Bluetooth, 3G cellular technology and Wi-Fi, though each of these adds to the cost of the device.

Rumors have been swirling about the device over the past week. The Origami Project Web site, which is owned by Microsoft, pledges that more information will come Thursday. However, sources say this is likely to be more buzz, with actual details not expected until later in March, likely at the CeBit show that takes place March 9-15 in Hanover, Germany.

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