According to an analyst from NPD DisplaySearch, a future Surface tablet from Microsoft will likely include a 7.5-inch display with a resolution of 1400 x 1050. At a density of 233 pixels-per-inch, this display will be sharper than both the iPad Mini and the Nexus 7, and to cut down costs Microsoft will likely incorporate the touch module into the panel.
CNET heard from another source that Microsoft is looking to target $399 for the new, smaller-sized Surface tablet, although as the device gets closer to availability the price could go even lower. Unfortunately NPD DisplaySearch don't believe that this tablet will be ready any time soon, stating that mass production is currently scheduled for Q1 of 2014, which is quite some time away.
It's unclear at this stage whether the new Microsoft tablet speculated here is the same as the new Surface that's rumored to be announced in June, as the gap between announcement and mass production looks to be quite large. That said, there have been a few rumors and reports floating around that relate to a Surface smaller than the current 10.6-inch models, so it's possible that what we're hearing here is accurate.