Apple is likely to launch a 7.85-inch iPad prior to the fourth quarter of 2012 in addition to a new iPad scheduled to be released at the end of the first quarter, according to sources in the supply chain.
We previously heard rumors of Apple planning the release of a 7-inch iPad by Christmas of 2010, and obviously that never happened. With the Kindle Fire gaining in popularity, however, this new rumor suggest Apple may be inclined to jump into the mini-tablet game to maintain a strong foothold in the tablet market. This rumor also backs up previous speculation of Apple prepping manufacturers for a 7.85-inch iPad for a 2012 release.
Then again, Apple never bothered competing with netbooks, so their not adverse to staying away from low-margin products, and saying the Kindle's size is the key to it's success seems rather superficial. Neither the Galaxy Tab nor PlayBook -- both 7-inches -- sold at anything approaching high volume.