According to a note in the hardware section of the company’s earnings report, “[c]urrent year cost of revenue included Surface inventory adjustments resulting from our transition to newer generation devices and a decision to not ship a new form factor.” Presumably that “new form factor” is in reference to the Surface Mini.
It is unclear right now if the Surface Mini has been cancelled for good, or if its launch might have been delayed, possibly to next year. Microsoft had supposedly yanked the Surface Mini’s announcement at the very last minute, and we guess the earnings report more or less confirms that.
One of the alleged reasons as to why Microsoft cancelled the Surface Mini was because they felt that it did not have enough differentiating factors that would justify its launch. After all small form factor tablets have pretty stiff competition from the likes of Apple’s iPad mini, the Nexus 7 from Google, and the Amazon Kindle Fire HDX.