What other hardware can we expect from Microsoft?

In an interview with the BBC, Steve Ballmer made a statement about Microsoft making more hardware.

He definitely wasn't referring to the accessory market. He might've meant to refer to the new Xbox, but that seems far away. And the whole interview was all about Windows 8 anyways. The two Surfaces (RT and Pro) are competing in the full-sized tablet and ultrabook market respectively, as per their processing and software capabilities.

That leaves three potent markets for Microsoft to enter: Smartphones, 7-inch tablets and 13-inch notebooks

First up, the phone market seems like an obvious place. Sure, the Lumia 920 and 8X are doing all they can to carry the Windows Phone flag, but given Nokia's floundering reputation in the smartphone market and the heft of the Lumia (which, apparently, seems to be an issue with many people) and HTC's budget offering being nowhere near that of Nokia, not many avenues remain for buyers. Both companies are dangerously close to a financial state where a sale may become necessary. A Surface phone would bring a massive stimulus to the WP8 brand. And if they decide to go the Nexus way, we may see something priced closer the Nexus 4 than the iPhone 5. This one seems rather unlikely, given how Microsoft is vehemently promoting HTC and Nokia (Samsung a little less) with their own cash, their hardware is remarkable, and unlike Android devices, they pack the pure WP8 experience. But they were reported as testing one with their manufacturers, so who knows....

The 7-inch tablet is the most interesting rumor of the lot. No product by Microsoft or any of it's OEMs currently competes in that segment. And if the rumors are to be believed, Microsoft may be creating a new segment for itself with a tablet with a focus on gaming. Throw in hardware controls, Xbox cross-buying and a dock to connect it to the Xbox, and they can expect to see me in line a week before the launch. And the form factor means that it even works as a reading device. And Xbox Music and SmartGlass seem to provide enough reason that NOT buying this tablet, for someone in the Microsoft ecosystem, would seem more unreasonable than buying one. This seems like the most likely rumor to come true.

This next one is more of a hope than a rumor. Microsoft have, I daresay, changed how we look at and think of computers. Their design, ideology and 'hybrid theory' seem really appealing. So, why not take it one step further. Why not release a full blown laptop? Microsoft seem to have achieved their ulterior aim of motivating it's OEMs into making good hardware, in terms of internals AND externals, but they still seem, well, uninspired in the mainstream computer market. So why not show them what good design is, again? Imagine if it came with a Haswell processor, a Retina-bashing touch screen, a(nother) revolutionary design and the best keyboard/ trackpad combination around. This, although the most unlikely, is the one I would most like to see fulfilled.

What do you guys think? Will any of these actually be released? Which one would you like to have? And what about other possible products?