As it stands now, Microsoft's "Windows Blue" looks to be a codename for its new yearly update process. Rather than launch a new OS every two to five years, the company plans to release annual refreshes, seemingly reverting back to the old pre-Windows 95 days of Windows 3.x. Just think of the next Windows release as v8.1.The latest report surrounding Windows Blue stems from an analyst of consumer technologies for Valley consulting firm Creative Strategies, Ben Bajarin, who believes this yearly refresh will allow Microsoft and its partners to build tablets in the 7- to 9-inch range. Why? Because "Blue" supposedly supports smaller screen sizes.

Look at it this way: Google's Android has finally taken the tablet lead from Apple, mostly thanks to the Nexus 7, Amazon's Kindle Fire tablets, and other tablets ranging between 7- and 9-inches. Meanwhile Windows 8 and Windows RT have disappointed in the tablet sector. Even Microsoft's own Surface units have only sold around 1.5 million total since the Windows RT version launched in late October.

That said, Microsoft needs to enter the sub 10-inch tablet market to help Windows 8 gain traction. There's talk that the company plans to license this scaled down version to tablet partners at a price less than it does for Windows 8: $40 to $50 per tablet, $20 cheaper than Windows 8. This could allow for tablets to be priced between $199 and $349.