According to the Verge, Microsoft has a 7-inch, gaming-centric tablet coming called the Xbox Surface, and its hardware is close to being finalised.
Microsoft recently entered the tablet and PC manufacturing game with the Surface RT and forthcoming Surface Pro, and a smaller tablet makes total sense. The 7-inch mark has been popular enough that even Apple has to relent and make the 7.89-inch iPad Mini. While Microsoft was able to stay competitive on price with the Surface though, it will be interesting to see how it does on price when up against the cut-throat Nexus 7 and Kindle Fire HD.
The report says that the tablet will likely have an ARM processor, but that could change to a future Intel SoC (system on chip) chipset. RAM will be custom “high bandwidth” sticks specifically made for gaming. The operating system won’t be the full version of Windows (obviously), and The Verge report also indicates it won’t be Windows RT, but rather a “custom Windows kernel”. That is probably to do with building integration with the next generation of Xbox software and XBLA, but it’s also probably safe to assume that any Xbox tablet will retain ties to Windows 8 and Windows RT, since simplifying the development process has been a priority for Microsoft. (Or, if it doesn’t, it would be a pretty big boner. But some benefit of the doubt has been earned.)
The Verge does waver a bit on the possibility that the Xbox Surface could get scrapped if Microsoft decides to release a more standard 7-inch Windows tablet. But if things stay on course, it would be announced before the Xbox 720. That means before E3, which in turn means before mid 2013.
Some other specs from the leak in June include a 1280×720 resolution display, an SD card slot and seven hours of battery life. [The Verge]