Microsoft will not take the wraps of a Surface Mini at a much-anticipated Surface event in the Big Apple, sources say. Instead, Microsoft will unveil a revamped Surface Pro with a 12-inch display.

Rumors of a Windows tablet in the 7- to 8-inch category have flared up after an Amazon retailer posted a listing for a casing for the non-existent Surface Mini early in May. However, just one day before the long-awaited event, reports have cropped up that Microsoft's tablet to be pitted against competition the likes of the iPad Mini and inexpensive "white-box" small-screen tablets. What's in its place? A 12-inch, two-in-one device that can be a tablet or an ultra-light notebook, depending on what you need to do. In short, Microsoft will unveil a better Surface Pro 2.

The Surface Mini was rumored to run on Windows RT, Microsoft's mobile operating system developed for devices running on ARM processors. These smaller tablets are designed primarily for consuming content, not creating it. However, Microsoft's figures show Windows RT isn't doing very well. In 2013, the company had to reduce the value of its RT OS by $900 million due to excess inventory of Surface tablets running on RT.

Analysts believe launching a larger tablet in place of a small screen would be a good move for Microsoft, especially in the face of RT's decline and other manufacturers driving the price of their tablets as low as $100. Instead of sacrificing its solid brand reputation to compete with low-priced tablets, it makes sense for Microsoft to bank on its strengths, namely its Office suite of productivity software which is heavily used by corporate clients.

"It is doubtful Microsoft will do a 7-inch or 8-inch product near-term," says (video) Rob Enderle, principal analyst of the Enderle Group in an interview with USA Today. "A number of vendors plan to have Windows tablets in the second half of the year running on Intel and priced around $100, and I just don't think Microsoft wants to play at that price point."

"With (Satya) Nadella, they have the opportunity to create a much richer, more differentiated line that is more strongly connected to cloud services and pulls from more of Microsoft," he added.

The 10.6-inch Surface Pro 2 has gained some traction in enterprise environments, particularly because it runs legacy Windows apps and could serve as a laptop for the mobile worker. Analysts believe that if Microsoft focuses on the enterprise market, it could very well command premium prices that clients are willing to pay. This means Microsoft could finally turn a profit on its tablet business, which has lost more than $1.2 billion since the first Surface tablet was unveiled in 2012.  

"Surface Pro is making some headway in corporate environments. The big improvements we saw in the Pro 2 in terms of performance, thickness and battery life made it a much more appealing offering," says Ross Rubin, an independent analyst at Reticle Research. 

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