'Windows Blue' Could Be Microsoft's Way To Create Cheap, 7-Inch Tablets

Microsoft is working on its next operating system, code-named Windows Blue, that could be released as early as this summer.

Only a few details about it have leaked so far, making Windows Blue sound like it will basically be an update to Windows 8, rather than a brand new thing.

But now reports are circulating that the one big thing Windows 8 would do is allow Microsoft and its partners to build smaller, cheaper tablets, in the 7-10-inch range.

So says Ben Bajarin, analyst of consumer technologies for Valley consulting firm Creative Strategies, in a column published by TabTimes.

He writes:

"Microsoft has been glaringly absent from the tablet discussion in the white hot 7-8” form factor. My firm estimates that in 2013, sub 10-inch tablets will dominate tablet sales and represent more than 60% of total sales. Windows 8 today can only go as small as 10.1-inches. They are losing ground and offering their partners no solution for the hottest category of tablets."

But Windows Blue could be the answer, he says, because it is expected to support smaller screen sizes. Plus, Microsoft is expected to sell it to partners for less than Windows 8. It could cost them $40-$50 per tablet, which is at least $20 cheaper than Windows 8, Bajarin says. The drop in price allows them to profitably make tablets in the $199-$349 range.

Because early sales reports on Windows 8 tablets, including Microsoft's own Surface, have been disappointing, Microsoft desperately needs to make Windows 8 tablets more attractive to consumers. Smaller, cheaper ones could be the way to do it.

Microsoft is surely aware of this. In fact, last month, speaking at the Goldman Sachs Technology & Internet Conference, Microsoft's CFO Peter Klein confirmed that the company is ready to deliver smaller tablets, reports Mary Jo Foley at ZDNet.

"We've done a lot of the hard work in the developer platform," Klein said. "We are well set up to respond to demand as we see it" with different-sized form factors, he said.

It's reasonable to assume that by "hard work" he was referring to Windows Blue.