The company is planing to bring a new standard across Windows powered systems and phones to provide a low cost solution with yearly updates. This release is rumored to be planned to due in mid- 2013.
This will include UI changes and alternations to the Windows platform and pricing, giving it a code name “Blue”, although Microsoft will likely keep the name “Windows 8”.
Since Windows 8 just just release in October, Microsoft plans to provide a low cost- or even a free upgrade so that everyone installs it. However, chances are this may not happens since it will stop accepting apps that are built specifically for Windows 8, forcing the app creators to code for Windows Blue OS.
Once its updated, Microsoft will only release annual upgrades so that they can keep the OS more competitive compared to Apple and Google.
Source: The Verge