Microsoft is planning a new lineup of Surface tablets that includes a 7-inch model designed to compete with Apple’s iPad mini and Google’s Nexus 7, The Wall Street Journal reports. The device will enter mass production later this year, according to people familiar with Microsoft’s plans, but it’s unclear when the company will bring the new slate to market.

The Journal reports that Microsoft didn’t start planning a 7-inch tablet until recently, having seen the response to the “rapidly growing popularity of smaller tablets.” According to research firm IDC, half of the tablets shipped during the fourth quarter of 2012 were smaller than 8 inches in size.

Microsoft decision to expand its Surface lineup comes as sales of desktop and laptop computers are declining. IDC reports that sales of PCs fell by “double-digit percentages” during the first three months of 2013, compared with a year earlier. While the tablet is a large contributor to that change, the customer confusion caused by Windows 8’s new interface is also being blamed.

Microsoft hinted at the possibility of a smaller Surface tablet when it recently updated its Windows 8 specifications to support smaller displays with a 1024×768 resolution. That’s the same resolution offered by the iPad mini’s 7.85-inch display.

Microsoft is also continuing to test smartphones, The Journal reports, but component makers say it still isn’t clear whether it will launch such a device.

• SourceThe Wall Street Journal