Microsoft (NASDAQ:MSFT) did something a little surprising when it launched the Surface Pro 3 in June: Cut the Surface Pro 2's time in the sun short by about four months. The rationale behind this early swap-out was strong: Microsoft wanted in on the back-to-school PC buying rush, and since the Surface Pro 3 was touted as the tablet that could replace one's laptop, it made sense to get it to the market.

While there's not much coming from the rumor mill these days about the Surface Mini, DigiTimes reported recently that the components for a 10.6-inch Surface (which could be called the Surface 3) would go into volume production in August, and that the device itself would begin volume production in September. Device availability would follow in October.

The question, then, is whether this is legitimate or just another unsubstantiated rumor.

10.6-inch means two choices
If a new 10.6-inch Surface is on the way, it could be a direct successor to either the Surface Pro 2 or the Surface 2 -- both of which were 10.6-inch products.

The Surface 2, however, was based on Windows RT, which meant that it could not run most -- possibly any -- of the standard Windows desktop applications featured on a full Windows 8.1 system powered by an Intel (NASDAQ:INTC) compatible processor.

This limited the Surface 2's functionality as a PC. Furthermore, the availability of lower-cost alternatives from companies such as ASUS that did support the full suite of Windows applications available significantly diminished the value proposition of the Windows RT-based Surface 2.

Under the assumption that Microsoft won't try again with a Windows RT-based system with a 10.6-inch Surface 3, the question becomes, "What hardware would such a device use?"

Two chip options: Atom or Core M
If Microsoft wants to do a straight successor to the Surface 2, but with full Windows application compatibility, it could use an Intel Bay Trail Atom processor. The problem is that Bay Trail is getting pretty long in the tooth at this point.

Microsoft would need to refresh the Surface yet again when the follow-on to Bay Trail -- known as Cherry Trail -- hits the market late this year and ramps up throughout the first half of 2015; not a particularly good option at this point.

Microsoft could instead upgrade the 10.6-inch Surface Pro 2 (and perhaps call it the Surface 3 or just market it as a smaller Surface Pro 3). The best bet for such a device would be Intel's upcoming Core M processor, which should enable a fan-less design.

The one snag he timing of these chips' availability is a tad murky as Intel has claimed that devices using this chip should be on the shelves by the holiday season. 

Foolish takeaway
At this point the rumor passes the initial smell test -- it's completely conceivable that Microsoft could issue a new 10.6-inch Surface later this year. Whether Microsoft does, and what such a product would look like, are the real open questions. Given the rumored timelines, it won't be too long before those answers become clear. 

Ashraf Eassa owns shares of Intel. The Motley Fool recommends Intel. The Motley Fool owns shares of Intel 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.

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