Microsoft is developing a smaller version of Surface tablet with 7” display and it should be mass produced later this year. The software giant plans to chase the likes of the Google Nexus 7 and Apple iPad Mini. Microsoft’s next tablet ambition is aimed to expand its presence in the market. Sources say that smaller tablets with 7” displays were not part of Microsoft’s grand strategy, but the company finally realizes that an effective response is needed.

So far, the company hasn’t pushed devices running Windows 8 OS below 10-inches, meaning Microsoft is missing out current boom in the mini tablet segment. Microsoft is also facing shrinking sales of laptops and desktops, hurting its software sales somewhat.

The touch-optimized Windows 8 OS fails to revive the sales of personal computers as consumers still find Windows 7 an effective platform for their daily needs. A new software version called Windows Blue is also being prepared and it may be available for use along with the small Surface tablet.

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