7 Inch Surface Tablet: Microsoft – Go Small or Go Home

7 Inch Surface Tablet: Even though the Microsoft Corporation (NASDAQ:MSFT) Surface tablets have not lived up to the expectations of many, it appears that the company is happy with the direction it is headed. For this reason, among others, there are reports that MSFT may be looking to expand in the near future.

According to a report by The Wall Street Journal, “The software giant is developing a new lineup of its Surface tablets, including a 7-inch version expected to go into mass production later this year, said people familiar with the company’s plans.”

Steve BallmerAt this point, it is safe to say that Microsoft Corporation (NASDAQ:MSFT) understands the importance of offering a full range of tablets, varying in size, to ensure that it can compete with industry frontrunners including the iPad mini by Apple and Google Nexus 7.

While this is something the company is planning on for the future, the same report goes on to say that “one person familiar with Microsoft’s product plans said the 7-inch tablets weren’t part of the company’s strategy last year, but Microsoft executives realized they needed a response to the rapidly growing popularity of smaller tablets like Google Inc.’s.”

This goes to show just how quickly things can change in the tablet market. Not long ago, Microsoft Corporation (NASDAQ:MSFT) executives likely felt that its lineup of Surface tablets was enough to compete. Now, things have changed and the company has to bring something a bit smaller to the market.

Here is one reason why the company has to make this move: according to research firm IDC, half of the tablets shipped during the fourth quarter of 2012 were eight inches or smaller. In other words, if you don’t have a smaller tablet in your lineup you will find it a challenge to compete with the companies that do.

In the past, Microsoft Corporation (NASDAQ:MSFT) was able to rely on sales of desktop and laptop computers to carry the company. However, sales in these areas are declining as a growing number of people begin to rely on tablets.

In fact, IDC and Gartner Inc. are reporting that “sales of PCs fell by double-digit percentages in the first three months of 2013 compared with a year earlier.”

It will be interesting to see when Microsoft Corporation (NASDAQ:MSFT) decides to roll out its smaller tablets, as well as how the public receives these devices.

What are your thoughts on this news? Do you think it will help Microsoft grab more share of the tablet market?

For something potentially even more interesting, check out this concept of what a Surface Phone could look like: