It is no secret that Steve Jobs was against it, but there seems to be more and more credibility to the rumor that Apple is developing a smaller, 7.85″ iPad Mini.
Another new report indicates that Apple just might have sealed the deal with AU Optronics to provide the displays needed for this smaller form factor device.
Along with AU, LG has been reported as another supplier of the displays required and if produced, most rumors favor Apple working with Pegatron Technology in lieu of the usual Foxconn relationship. This may make sense if Apple is unwilling to compromise the production of the existing 10″ iPad lineup, especially if the mini version arrives in the third quarter of 2012 just in time for the holiday season.
At first the idea seemed rather far fetched. Why would Apple want to fragment their product offering in such a way that there is another screen size to support and supply? Why would they want to try to compete in the lower-priced tablet market when they are already so successful in their own segment? It might not be about competing at all.
This isn’t uncharted territory for Apple. If you recall there are a considerable number of iPod choices to be had, many of which have been very successful in spite of their same-branded competition. I believe this product variety erupted from consumer demand –some people wanted smaller, more portable devices while others wanted more storage space and more robust interfaces. The same could be true of the iPad. Perhaps Apple is watching the market and seeing that people like the smaller tablets. Perhaps they have done research that says the smaller form factor works well for their new educational initiatives (offering even better battery life or other hardware-centric value).
Whatever the reason, I doubt it is based on price. People who want iPads are paying what they need to in order to get one. If Apple releases a smaller iPad it will be because the market demands it (whether they realize it yet or not).