7 inch Microsoft Surface tablet in the works

According to the report, Microsoft hadn’t originally planned to offer a 7 inch tablet running Windows software. Right now Microsoft’s only tablets are the 10.4 inch Surface Pro and Surface RT, and every PC maker that’s released a Windows RT or Windows 8 tablet has gone with a 10 inch or larger screen.

But some of the most successful tablets on the market today have 7.9 inch displays (like the iPad mini), or 7 inch screens (like the Google Nexus 7 and Amazon Kindle Fire). So it would make sense for Microsoft to try to meet consumer demand for a smaller tablet… although it remains to be seen whether there’s significant consumer demand for a Windows tablet with that screen size.

Shipments of traditional PCs have been declining, while mobile tablet sales have been on the rise. So Microsoft took a big gamble with the launch of Windows RT and Windows 8, focusing on making its flagship operating system more touch-friendly. That cheap tablets hasn’t seemed to help PC sales much in the 2dffREs3 short term, but it’s probably a bit early to count Microsoft out.

Desktop and laptop PCs may represent a shrinking portion of the computing pie, but Microsoft’s software still dominates those platforms.

The best hope for Microsoft just might be Xbox integration that goes far beyond current Windows tablets and Windows Phones. If, for instance, a 7 inch tablet Surface had the ability to stream console games with an attachable game controller, it could lucrative add-on for the next Xbox while knocking the wind out of Nintendo's Wii U.

The Journal's report doesn't have any specific details about the rumored tablet, and it's not clear whether the tablet will even run a full version of Windows. A previous report by The Verge claimed Microsoft was developing a 7-inch "Xbox Surface" tablet that would run a custom, Xbox-focused Windows kernel and focus on gaming. Recent scuttlebutt suggests the next-generation Xbox will be based on Windows 8, which could help pave the way for a 7-inch "Xbox Surface" tablet, or for deeper Xbox integration in a Windows-based Surface tablet.

Microsoft may be preparing to build a 7 inch version of its Surface tablet. That’s hardly shocking. We’ve been hearing rumors and spotting evidence for months. But now The Wall Street Journal reports that “people familiar with the company’s plans” say new Surface tablets are in the works… and that includes a 7 inch model.