SAN FRANCISCO:  Apple Inc., seeking to win a larger share of the market for handheld computers, is planning to unveil a tablet PC this month, according to a person familiar with the matter.

The device is scheduled to go on sale in March, said the person, who declined to be identified because details of the product are private.

Offering a tablet PC would help Apple capitalize on demand from consumers for devices that can surf the Web and play movies and music. The product may also spark fresh competition for Amazon.com Inc., maker of the Kindle electronic-book reader, as well as makers of netbooks such as Acer Inc., Asustek Computer Inc. and Hewlett-Packard Co.

“We expect the key differentiator of the device to be its software,” Gene Munster, an analyst at Piper Jaffray & Co. in Minneapolis, wrote in a note to clients last week. “Apple’s tablet would compete well in the netbook category, even though it would not be a netbook.”

Apple might sell about 1.4 million tablets in 2010 if the product goes on sale in March, Munster wrote. If the product sells for about $600, that would increase the company’s sales by about 2%, he said. Apple may design the tablet to support the more than 100,000 applications that currently run on its iPhone, he said.

“We are not going to comment on rumors and speculation,” said Steve Dowling, a spokesman for Cupertino, California-based Apple.

Drew Herdener, a spokesman for Amazon, declined to comment.

Online Content

To distinguish the tablet from Amazon’s Kindle DX and other e-book readers, Apple may turn e-books and magazines into interactive experiences, with links that call up videos such as author interviews, photos, audio, Web sites and other content, including advertising, according to Kathryn Huberty, an analyst with Morgan Stanley in New York. She expects a 10-inch (25- centimeter) touchscreen device with built-in WiFi for connecting to the Web.

Apple, which also makes the Macintosh computer, advanced $3.28 to a record $214.01 in Nasdaq Stock Market trading yesterday. The shares more than doubled last year on investor optimism the company will continue to sell more Macs and iPhones and add new products.

Analysts, including UBS AG’s Maynard Um, expect the tablet could be an oversized version of Apple’s 3.5-inch iPod Touch media player. Or it may take the form of a scaled-down notebook computer, Um, based in New York, said.

The Wall Street Journal reported the expected release date of the tablet yesterday.

10 Million

Apple expects to ship 10 million tablet computers in the device’s first year of release, former Google Inc. executive Lee Kai-fu wrote on his blog last week, citing a friend familiar with the project whom he didn’t name.

The device will be introduced by Apple Chief Executive Officer Steve Jobs this month and sell for less than $1,000, according to the post dated Dec. 28. It will feature a 10.1 inch multitouch screen with three-dimensional graphics and look like a large iPhone, Lee wrote.

Lee, who was president of Google’s Chinese operations, left the company in September to start Innovation Works, a Beijing- based technology fund with investment from WI Harper Group and Foxconn Technology Group. Foxconn’s flagship Hon Hai Precision Industry Co. business is the world’s largest electronics manufacturer and the supplier of Apple’s iPhone.

Lee said in an e-mail to Bloomberg News last week that the information didn’t come from Foxconn or Apple.