The tablet market has quickly bifurcated into two distinct market segments. Apple kicked off the tablet festivities in 2010 with the iPad, starting things off with a full-sized 9.7-inch tablet. A year later, Amazon.com made waves with its Kindle Fire that would spark considerable interest in the small-sized segment with its 7-inch display.
It wasn't long before Google jumped into the small-sized arena with its own Nexus 7. Now Microsoft is officially a first-party tablet player with its Surface lineup that squares off directly with the iPad.
Each of these tech giants has realized that they need two separate product offerings targeting both the full-sized and small-sized tablet segments in order to succeed.
iPad with Retina Display
Kindle Fire HD
8.9-inch Kindle Fire HD
Sources: Company websites. N/A = not applicable.
Microsoft has yet to officially enter the small-sized segment, but there's no shortage of speculation and evidence that it will do so in the near future. Speaking of speculation, NPD DisplaySearch analyst Richard Shim believes that Amazon is about to go even bigger while Microsoft is about to shrink its Surface.
Shim tells CNET that his supply chain sources are pointing to a 7.5-inch display on Microsoft's smaller model, which would be splitting the difference between the most popular 7-inch (Amazon and Google) and 7.9-inch (Apple) alternatives. The panel is expected to sport a resolution of 1,400 x 1,050, sharper than all of the current players in the small-sized segment. Shim believes that Microsoft is targeting Q1 2014 for mass production and is aiming for "multiple millions" of units while looking to shave costs in order to target lower price points.
Even though Amazon has a 8.9-inch tablet, Shim also told CNET is a separate report that Amazon may be going even bigger. The e-tail giant is moving up to a 10-inch display with the same specs as Google's Nexus 10. Mass production of this 10-inch Kindle Fire is expecting to ramp in the third quarter. Moving further upmarket may be curious since Amazon's recent price cuts to its 8.9-inch model suggest it's not selling particularly well.
Amazon's tablet successes may be giving it courage to venture out from shelter under Apple's price umbrella, while Microsoft's modest start is reason for the software giant to seek cover under the same umbrella.
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The article Amazon Prepares to Go Bigger While Microsoft Shrinks originally appeared on Fool.com.
Fool contributor Evan Niu, CFA, owns shares of Apple. The Motley Fool recommends Amazon.com, Apple, and Google. The Motley Fool owns shares of Amazon.com, Apple, Google, and Microsoft. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.