Microsoft recently confirmed that they have indeed been working on the first update to Windows 8, which is codenamed Windows Blue. Now they have further confirmed that the update will be officially called Windows 8.1 and that it will be made available as a free download for Windows 8 users through the Windows Store.Microsoft doesn't generally charge users for incremental updates, which have previously been offered as Service Packs on the Windows Platform. However with the modern approach of Windows 8 we weren't certain if Microsoft would change their previous policies. Especially since Apple charges users almost on a yearly basis for their incremental updates to Mac OS.
There is still no information on when the final version of the update will be made available, even though it is assumed it will be ready in time for the holidays. However Microsoft has stated that they will be released a public preview on June 26th, which happens to be the first day of the BUILD 2013 developer conference.
Windows 8.1 will add support for smaller screen tablets, finally giving Microsoft a chance to compete with the Apple iPad mini, Google Nexus 7 and Amazon Kindle Fire.