It was inevitable: Microsoft (NASDAQ:MSFT) had no choice but to pursue the small-sized tablet segment if it hopes to be relevant. Consumers are increasingly voting with their wallets that smaller tablet form factors are the way to go. Apple (NASDAQ:AAPL) has now jumped into that market segment with the iPad Mini, an implicit concession that Steve Jobs was wrong when he proclaimed that the perfect tablet size was around 10 inches.
Thus far, Microsoft's forays into the tablet market have been with larger devices, including its own Surface tablet that sports a 10.6-inch display. Most Windows 8 and Windows RT devices made by OEMs have also been in the full-sized segment. That's all changed with the Acer Iconia W3 that was just unveiled at Computex Taipei.
The Iconia W3 is being billed as the "industry's first 8-inch Windows 8 tablet," and its 8.1-inch display will compete directly with the iPad Mini's 7.9-inch screen. An Intel (NASDAQ:INTC) Atom chip is found inside, which promises all-day battery performance. Intel has been making headway in tablet wins, including scoring a spot in Samsung's new Galaxy Tab 3 10.1 (also with an Atom processor). Intel's pricier chips also contribute to the higher price of the Iconia W3, which will retail for $379.
Microsoft is also exploring a new strategy of bundling in a basic version of Office with smaller devices. That may give the Iconia W3 a leg up in productivity against the iPad Mini, but the display's resolution is unimpressive at 1,280 x 800. Mind you, that's higher than the iPad Mini's current 1,024 x 768, but this is 2013 and Apple is expected to move to Retina iPad Minis in a matter of months. Beyond just resolution, the Iconia W3 has poor viewing angles and color reproduction, according to The Verge.
The Iconia W3 may not have a good shot at competing with the iPad Mini, but more importantly the device signifies Windows 8's entry as a platform into the small-sized segment. This is a much bigger deal for Microsoft than it is for Acer. Now the software giant needs to release a 7-inch Surface.
Fool contributor Evan Niu, CFA, owns shares of Apple. The Motley Fool recommends Apple and Intel. The Motley Fool owns shares of Apple, 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.