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Microsoft has confirmed that it is working with manufacturers on the concept for a new personalised handheld device under the name Origami Project.

News of the device started circulating on the Web after Microsoft put up a cryptic Web site that hinted at a Thursday announcement, but gave no details. The site generated so much buzz among bloggers that a Microsoft technical evangelist on Monday tried to temper expectations that the company was ready to release a product which will also act as a home automation device.

Soon after discovery of the Origami Project Web site, a video apparently of the device started circulating the Internet. The video, which was found on the site of production firm Digital Kitchen, shows people using a handheld computer with a touch screen that’s being used to watch video, access the Web, send pictures and instant messages and play videogames. The machine appears to have a wireless connection and can also act as a home automation controller. 

“While Origami is a concept we’ve been working on with partners, please know that the video seen on Digital Kitchen’s web site is a year old and represents our initial exploration into this form factor, including possible uses and scenarios,” Microsoft said in an emailed statement. “However, we are excited to share more details about the evolution of the Origami concept with you in the coming weeks, so stay tuned!”

A company spokesman told the Seattle Post-Intelligencer newspaper that no announcement was planned for Thursday. Instead, the Origami Project site would be updated with more details.

Indeed, Robert Scoble, tech evangelist and Microsoft blogger, warned that speculation on the Web may have gone too far in building expectations for a product release. “Seriously, let’s keep our hype in check, OK?” Scoble wrote.

Sam Bhavnani, analyst for Current Analysis, said it is unlikely Microsoft is working on a branded product. With the exception of the Xbox, keyboards and mice, software maker manufactures very little hardware, so not to compete with partners that build computers and devices running its software.

The Digital Kitchen video appears to be a prototype of a device that Microsoft circulated among its manufacturing partners, Bhavnani said. “Microsoft comes out with the concept and that drives the industry forward,” Bhavnani said. “They sell more software, and manufacturers have something very useful for the end user.”  The secretive Origami Project site, however, is unusual for Microsoft, which is apparently trying its hand at viral marketing, a tactic in which marketers use mystery or humor to generate a buzz on the Web.

“Microsoft typically doesn’t put up sites that don’t tell you much, but pique your interest,” Byhavnani said.

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