According to NPD DisplaySearch, Microsoft is working on a Surface tablet that features a 7.5 inch screen and will feature a price point of $399. Microsoft's current Surface RT features a 10.6 inch display starting at $499.
"From the supply chain side, we're seeing the panel specifications, the touch module, the mass production schedule being made," NPD DisplaySearch adds. The smaller device will feature a 7.5 inch panel with a 1400 x 1050 resolution.
NPD DisplaySearch also adds that mass production of this device wont begin until Q1 of next year. Microsoft may begin production earlier and then ramp up to a significant volume by Q1 2014.
The reason it is going to take so long is because Microsoft wants to balance price with functionality. "They're looking for ways to cut down the price on their devices. So, for example, with the 7.5-inch device, they're looking for a touch solution that incorporates the panel and the touch module," NPD adds.
According to a recent report, Microsoft is expected to announce its next-generation Surface devices during Build 2013 in June. On top of which, these new Surface 2.0 devices will only feature a 7inch to 9inch display to battle against the current demand for small screen touch devices.