Steve Ballmer, the CEO of Microsoft, will make a keynote speech at CES 2011 in Las Vegas in a few days and it is likely that it will demonstrate a working prototype of an ARM-based device running Windows 7.

Both Bloomberg and the Wall Street Journal have confirmed this citing people close to Microsoft's plans.

Microsoft already has an operating system running on ARM-processors, Windows Phone 7, but it is likely that the new version of Windows will be geared towards tablet devices rather than handsets.

Bearing this in mind (and in the hindsight), it did made sense for Microsoft to rename Windows Mobile 7 to Windows Phone 7 if a Windows 7 for tablet version is launched next year.

Microsoft is also an ARM licensee which many understood would have helped the company build its own microprocessor and SoC solutions but this is unlikely.

How this will impact its relationship with Intel remains to be seen. The semiconductor giant has already made overtures to Microsoft's rivals and went as far as launching its own Linux-based operating system before merging it with Nokia's own to form Meego.

If Microsoft does indeed go ahead with a Windows 7 For Tablet operating system, it will be the first time since the days of the DEC Alpha that the company will have produced a non-X86 desktop OS.