Speculations are circulating that Microsoft will soon release in the market a smaller and cheaper Surface tablet.

The rumours are apparently addressing talks that the manufacturer finally realised it is difficult to sell $500 tablets unless it's an Apple while running on an open source OS which should warrant lower prices.

Maximum PC quoted NPD Display Search that Microsoft is set to introduce a 7.5-inch Surface tablet with a 1500x1050 resolution, but mass production wouldn't start until the first three months of 2014. However, Digitimes' version of the rumour is that the screen would be between 7 and 9 inches, based on its sources who belong to the upstream supply chain.

The device might be announced at Microsoft's Build Developer Conference in June.

Microsoft founder Bill Gates debunked BlackBerry's forecast that the tablet will die within five years. He said it would be harder to distinguish products that are PCs and tablets, stressing that the Surface brings the tablet's portability and the PC's richness.

That is one major difference between the Surface and iPad, he pointed, because users of the Apple tablet are frustrated because they can't type, create documents and lack Office in their tablet computers. Despite these limitations, Apple, however, sold 19.5 million iPads in the last quarter versus 11.7 million PCs sold by HP, the world's number one PC vendor.

Although techies consider the Surface Pro the best Windows tablet, its sales were not impressive, prompting ZDNET to make a list of five factors which could make the next-gen Surface tablet more popular with consumers.

These are:

1. 7-inch form factor - Mini versions of tablets are popular with users because the smaller device often fits into the work style of most people. Proof of this is that the iPad mini outsells the full-sized iPad.

2. Xbox Arcade library - ZDNET, however, concedes it unlikely happening since the current-generation Xbox 360 is based on a 64-bit PowerPC architecture while the original Xbox was based on a Pentium III architecture. Given that the present Surface tablets run on ARM and Core i5, to get Xbox applications to run on a Surface device would be definitely a challenge.

3. Lighter and more comfortable to hold - The present Surface is said to be great on a desk but not comfortable on hands. ZDNET said that unless Microsoft improved the holdability of its tablets, it would have little chance of gaining widespread acceptance.

4. Lower price - The tech Web site pointed out that the reason why Nexus 7 and Kindle Fire became competition for Apple is their price tags at $169. ZDNET stressed that consumers are very price sensitive and would not bite a new Surface gadget if its price tag is unreasonable.

5. Metro apps - ZDNET added that Windows' Metro app is quite unusable, except for some useful for verticals and vertical-market custom software. Unless Microsoft creates a stable of really good and best-of-show Modern UI apps, any new tablet under the Surface brand is bound to be a loser.

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