Earlier this week, software giant Microsoft (NASDAQ:MSFT) unveiled a pair of second-generation Surface devices. The company did not say anything about its rumored Surface Mini, a device that could target the small-sized tablet market. Consumers are beginning to shift preferences toward smaller devices for a wide number of reasons, including price. It seems inevitable that the company will address this market segment with a Surface Mini.

Reports suggest that Microsoft will use Windows RT and ARM-based chips in the Surface Mini, potentially in pursuit of better battery life as well as cost savings. Windows RT has fared poorly in the market thus far, which could threaten the Surface Mini's prospects.

On the other side of the spectrum, Apple (NASDAQ:AAPL) has reportedly tapped Quanta Computer to build even larger versions of its iPad. The device could potentially sport a 12- to 13-inch display. There may not be as much opportunity in that segment in terms of unit volumes, but it should entail higher margins thanks to higher prices if Apple launches the rumored device.

In this episode of Tech Teardown, Erin Kennedy discusses the latest from the rumor mill with Evan Niu, CFA.

Erin Kennedy owns shares of Apple. Evan Niu, CFA, owns shares of Apple. The Motley Fool recommends Apple. The Motley Fool owns shares of Apple 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.