Rumors are rife that the next-gen Microsoft Surface tablet will sport a 7.5-inch display and set consumers back $399.

The latest information comes courtesy of CNET, citing analyst forecasts from NPD DisplaySearch and an anonymous source.

"A future Microsoft tablet is expected to sport a 7.5-inch display, as the budding tablet maker seeks to reduce both size and price, according to NPD DisplaySearch," reports CNET.

Friday, rumors ran amok that Microsoft was prepping for smaller tablets for "Surface Wave 2," which would allegedly be unveiled in June 2013 at the Redmond-based company's Build developer conference. However, the latest report hints at a Q1 2014 mass production for the smaller tablet. A possibility exists that this rumor refers to a Surface Wave 3 tablet, and the other models would launch in June 2013.

"From the supply chain side, we're seeing the panel specifications, the touch module, the mass production schedule being made," Richard Shim, an analyst at NPD DisplaySearch, told CNET.

According to Shim, "Mass production is Q1 [first quarter] 2014. Apparently, pretty significant volume. Multiple millions."

The next-gen Surface tablet is expected to sport a 7.5-inch panel with 1400 x 1050 pixels resolution, according to Shim. That is a pixel density of 233 ppi, which is higher than that of rivals Google Nexus 7 and Apple iPad mini.

Mass production of the next-gen Surface tablet is expected to start in Q1 2014, and the device should cost $399 or less. That is, if Microsoft manages to get its component prices down.

"They're looking for ways to cut down the price on their devices. So, for example, with the 7.5-inch device, they're looking for a touch solution that incorporates the panel and the touch module," notes Shim.

With June around the corner, we'll have to wait and see what Microsoft has up its sleeve and if the rumors of the next-gen tablet bear fruit. It remains to be seen if the device can rival the impending iPad mini 2 and Nexus 7.7.