Amidst plummeting personal computer shipments, Microsoft is reportedly working on a new lineup of Surface tablets, including a 7-inch model, according to the Wall Street Journal(Opens in a new window).

Citing sources familiar with Redmond’s plans, the Journal reported that production is expected to begin later this year, but offered no timeline for its release.

Microsoft declined to comment on the rumors.

The software giant introduced its Windows RT-powered Surface tablet in June 2012, and it was released in October with the launch of Windows 8. A Pro version sporting the full Windows 8 OS arrived earlier this year, but both tablets come in at 10.6 inches to take advantage of Redmond’s new OS.

Half of all tablets shipped in the fourth quarter of 2012 were sub-8-inch devices, according to recent IDC statistics, which pointed to the continued growth of smaller tablets this year, and beyond.

Microsoft is one of the last tablet makers standing without a petite version of the electronic slab. Available 7-inch tablets include Google’s Nexus 7 , the Amazon Kindle Fire HD, Samsung’s Galaxy Tab 2, and the Nook HD, while Apple’s iPad mini comes in at 7.9 inches. A 7-inch device was not part of Redmond’s strategy, but the Journal source said that executives realized the need to join the popular tiny-tablet trend.

Rumors about a possible 7-inch tablet emerged last month when Microsoft lowered the minimum resolutions for Windows 8 devices from 1,366 by 768 to 1,024 by 768 at a depth of 32 bits.

The Journal did not mention if the 7-inch tablet would be a Windows RT or Windows 8 tablet, or discuss price points except to say that Redmond might offer discounts on Windows and Office software. Top 7-inch rivals currently start at $199, while the Surface RT tablet currently starts at $499.

For more, see PCMag’s reviews of the Microsoft Surface with Windows RT and Microsoft Surface Windows 8 Pro.

Editor’s Note: This story was updated at 2:05 p.m. Eastern with comment from Microsoft.