Should Microsoft Launch a 7-inch Surface Tablet?

It's tough to ignore the demand that exists for tablets in the 7-inch category, regardless of whether they're being scooped up for their size and portability, or because they typically cost significantly less than larger slates. Even Apple decided to jump into the category with its iPad mini. Will Microsoft be next?

It appears that way. Citing "people familiar with the company's plans," The Wall Street Journal reports Microsoft is developing a brand new line of Surface slates, including a 7-inch model that will go into mass production sometime later this year.

Image Source: Flickr (Lachlan Hardy)

If Microsoft is serious about selling its own hardware, a 7-inch slate might be the best way to go. Consumers haven't flocked to Surface RT the way the Redmond outfit hoped. Back in January, the International Data Corporation (IDC) released data showing Surface RT was unable to crack into the top five tablets in terms of shipments after moving less than 900,000 units in the fourth quarter of 2012. To be fair, Surface RT debuted about a month into the quarter, but the sales figures just aren't super impressive still to this day.

Also according to IDC, half of all tablets shipped in Q4 were smaller than 8 inches, so there's a big market opportunity there. The question is, can Microsoft compete against the likes of the iPad mini, Nexus 7, Kindle Fire HD, Nook HD, and others?