Things really aren’t looking good Microsoft as the company tries to compete in the tablet market. A new report says they won’t have a tablet operating system ready until mid-2012.

[ad#Google Adsense 300×250 in story]Testing of Microsoft’s next-generation operating system, which is said to be more touch friendly for tablets, will not start until the end of 2011, according to Bloomberg. That would put the OS in the hands of tablet manufacturers sometime in the back-to-school shopping season of 2012.

The news clearly shows how much Microsoft was unprepared for Apple’s release of the iPad and iOS. If Microsoft had any inkling of where the market was going, they surely would have been ready before now with a tablet operating system.

Microsoft’s news comes just a couple of days after Apple CEO Steve Jobs introduced the second generation iPad in San Francisco. This is Apple’s second major tablet release before most companies even have their first tablet out the door.

At this rate, Microsoft will surely be competing against the iPad 3 or even worse. Apple could be on the verge of the iPad 4 before Microsoft gets its operating system out the door.

The news for other competitors wasn’t good this week either. RIM on Friday said its chief marketing officer, Keith Pardy, was leaving the company just weeks before the PlayBook was due to be released.