A rumored 7-inch tablet could make Steve Ballmer's hardware dreams a reality

By Nathaniel Mott , written on March 29, 2013

From The News Desk

All hail the coming of Microsoft's 7-inch tablets! Maybe. Hopefully.

Microsoft recently changed its minimum hardware requirements, allowing manufacturers to build devices with the same resolution (1024x768) as Apple's iPad mini. This would allow Microsoft and its hardware partners to develop products smaller than the current crop of 10-inch tablets -- an increasingly important market, given the popularity of both the iPad mini and Google's Nexus 7.

Microsoft has been a "devices and services company" without very many devices for some time. Besides the Surface RT and the Surface Pro, which have suffered from an underwhelming debut and have reportedly missed sales predictions, Microsoft's only real "device" is the Xbox 360. Three products does not a devices company make. A 7-inch tablet -- and perhaps a smartphone -- would allow the company to better compete with Apple and the newly-hardware-focused Google.

"As we, with our partners, develop new Windows devices we'll build in services people want," writes Microsoft CEO Steve Ballmer in a letter to shareholders. "Further, as we develop and update our consumer services, we'll do so in ways that take full advantage of hardware advances, that complement one another and that unify all the devices people use daily."

Basically: Microsoft is no longer content to build Windows and Office products to be used on its partners' hardware. As Bloomberg Businessweek put it, Surface is "an indictment of the entire PC and device industry, which has stood by for a couple of years trying to mimic Apple with a parade of hapless, copycat products."

The company proved its commitment to simultaneously releasing new hardware and services with the launch of its Surface products, which debuted alongside new Xbox-branded services like Xbox Music, Xbox Video, and Xbox SmartGlass. Now, as rumors of a 7-inch tablet from Microsoft swirl around the blogosphere, the company is rumored to be adding ebooks to its storefront.

A Windows-powered ereader has been rumored for some time, especially after Microsoft invested in the Nook business after Barnes & Noble spun it off in January of last year. The two companies were reportedly in talks to develop an ereader for some time before the project was cancelled, supposedly due to conflict over Microsoft's (canned) Courier project.

Now, as Barnes & Noble's Nook division continues to swirl the drain -- the company is literally giving 'em away -- it makes sense for the two companies to partner and make ebooks a core part of the Windows platform. Barnes & Noble would be able to shift from the hardware business, which has reportedly been on the company's mind for some time. The retailer considers its marketplace to be the "crown jewels" of its business, and tight integration with Windows products could allow those jewels to shine without the tarnish of an unprofitable hardware "shell."

If such a deal does happen, or even if Microsoft decides to introduce ebooks without Barnes & Noble (which would be an odd move, but could happen), the company would be better able to compete with Google, Apple, and Amazon. Xbox Music has a lead over Apple's ever-rumored music streaming service and Google's potential YouTube-branded product, and Microsoft's hold on the gaming market gives it a leg-up over both iOS and Android.

It's been almost six months since Ballmer wrote that letter to Microsoft's shareholders. Now, with the imminent announcement of Windows Blue, its next-generation operating system; the next Xbox, which is said to be coming either this year or in 2014; and this new rumor of a 7-inch tablet, Microsoft might finally be making good on its promise.

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