Microsoft is planning to build a seven-inch Surface tablet with production beginning later this year, according to the Wall Street Journal.
The move will see Microsoft stake its claim on the rapidly-growing market for smaller, lighter and most importantly, cheaper tablets. Among those to have already entered the seven-inch slate market are Apple, Android hardware makers, such as Asus, and Amazon with the Kindle Fire.
The smaller version of Microsoft's so-far slow selling 9.7 inch Surface Pro and RT tablets is a response to Apple's iPad Mini and Google's Nexus 7 tablets, sources close to the company's plans told the WSJ.
While there's no word on branding, it's likely to be a Surface device: Microsoft has repeatedly talked about extending the range with additional models. And while some analysts have found a growing interest in the Surface among enterprises, others have called demand for the existing Surface devices "disappointing". Microsoft has released no sales figures for the RT or Pro, but it is believed to have sold around 900,000 Surface RTs since launching.
Microsoft was tipped to be working on a 7-inch tablet or reader after recently relaxing Windows 8 certification guidelines for the minimum resolution from 1366 x 768 to 1024 x 768. The smaller resolution is in line with the iPad Mini (1024 x 768) and the Kindle Fire HD and Google Nexus 7, which are both 1280 x 800.
Apple's launch last year of the $369 iPad Mini coincided with Microsoft's release of the 9.7-inch Surface RT. Since then the share of smaller tablets has grown, with chopped-down slates accounting for around half the 52 million tablets shipped in the fourth quarter of 2012, according to IDC.
A smaller Surface RT and the arrival of smaller Windows 8 tablets by OEMs may help Microsoft address the pricing challenges it currently faces. IDC noted last November that although Microsoft's Surface offered a third credible choice to consumers, it would struggle at prices starting at $500.