Microsoft said to be working on a 7-inch Surface tablet

Microsoft Corp is developing a new lineup of Surface tablets, including a 7-inch version expected to go into mass production later this year, the Wall Street Journal reported, citing people familiar with the company's plans.

Microsoft executives felt they needed to keep pace with the growing popularity of smaller tablets like Google Inc's 7-inch Nexus and the 7.9-inch iPad Mini introduced by Apple Inc last October, one person told the paper.

Microsoft declined to comment to the Wall Street Journal. The company could not immediately be reached for comment by Reuters outside of regular U.S. business hours.

The report comes on the same day as another that said, personal computer sales had plunged 14 percent in the first three months of the year, the biggest decline in two decades of keeping records, as tablets continue to gain in popularity and buyers appear to be avoiding Microsoft Corp's new Windows 8 system, according to a leading tech tracking firm.

The huge drop over a year ago, the steepest since International Data Corp started publishing sales numbers in 1994, mark a new milestone in the apparent decline of the age of the PC as computing goes mobile via tablets and smartphones.

Total worldwide PC sales fell 14 percent to 76.3 million units in the first quarter, IDC said on Wednesday, exceeding its forecast of a 7.7 percent drop. It was the fourth consecutive quarter of year-on-year declines.

"Consumers are migrating content consumption from PCs to other connected devices, such as tablets and smartphones," said Mikako Kitagawa, an analyst at Gartner. "Even emerging markets, where PC penetration is low, are not expected to be a strong growth area for PC vendors."

Microsoft's new Windows 8 actually deterred potential PC buyers, IDC said, as users felt they could not afford touch-screen models required to make the most of Windows 8, even though the system runs equally well on standard PCs and laptops.

Edited by NDTV Staff from original story by Reuters