Multiple sources are saying that Microsoft is currently working on another Surface tablet, one that will likely be smaller in size than the current models, and less expensive as well. If the rumors are true, then it means Microsoft received the memo that $500 tablets without an Apple logo are a tough sell. which is the same memo Google's hardware partners received long ago in reference to Android.
If you recall, Android tablets didn't fly off of store shelves when they were first introduced, either. A big reason for that is because manufacturers were trying to compete at a premium price point with an open-source operating system that many assumed would lead to lower cost devices. It may have taken longer than most people expected, but Android tablets from name-brand vendors have certainly come down in price, and size, and they're selling extremely well as a result.
Whether or not Microsoft can enjoy the same sort of success by launching a smaller, cheaper version of Surface remains to be seen, but it's worth exploring. According to NPD DisplaySearch, Microsoft is planning to launch a 7.5-inch version of Surface with a 1400x1050 resolution (233 pixels per inch), CNET reports. However, mass production won't begin until the first quarter of 2014.
News and rumor site Digitimes is also saying a smaller Surface is in the works, though it pegs the panel as being between 7-9 inches in size. Citing sources from the upstream supply chain, Digitimes says Microsoft is likely to make an announcement at the company's Build Developer Conference.