WHY IT'S A GOOD IDEA: A smaller tablet would help Apple further its lead in the tablet market.
"From a competitive standpoint, we believe an iPad mini with a lower price point would be the competition's worst nightmare," says Shaw Wu, an analyst at Sterne Agee. "Most (competitors) already have a tough enough time competing against the iPad 2, as well as the new iPad."
WHAT IT MIGHT COST: It could be hard for Apple to make money from an iPad-quality 7-inch tablet that sells for $299. Analysts at IHS iSuppli estimate that a smaller tablet would cost around $250 to produce, a figure that doesn't include development costs, packaging or patent royalties. That suggests Apple would price it at $329 or $349.
WHY IT'S A BAD IDEA: A smaller iPad would be a headache for software developers.
"Going to a different screen size ends up being a ton of work," says Nate Weiner, the creator of Pocket, an application that stores Web pages and other material for later reading.
"If you take, for an example, an interface built for the iPad and try to cram it into the Kindle Fire, it just doesn't fit," he says.
However, developers who have already adapted their programs to the Kindle Fire or other 7-inch tablets wouldn't face a big hurdle in adapting to a third Apple screen size, Weiner says.
