Apple is coming out with a new mini iPad this fall, according to various reports.
According to the Wall Street Journal, Apple, the world's most valuable company, is moving toward mass production of small iPads. Suppliers in Asia are getting ready for this in September, suggesting that a launch for the device is near.
This mass production will set a stage to compete with Amazon's Kindle Fire and Google's new Nexus 7 tablet.
Reports from Bloomberg suggest that the new iPad Mini will be announced in October, which may fall in line with the release of iPhone 5, according to Game N Guide. The report also indicated that the iPad mini will have a 7 to 8 inch IGZO display with 330 pixels/inch. These new smaller iPads will be more affordable, according to Auto World News.
"We're starting to see more concrete evidence that it's going to be produced" in the October time frame, said DisplaySearch analyst Richard Shim, according to Indystar.com.
This iPad scaled down from its current size would be a potential rival to other small tablets, such as Barnes & Noble's Nook color, according to IndyStar.com. The iPad Mini would also add more luster to the evolving market for lower-cost media-consuming tablets that fit in the hand.
Right now, the Kindle Fire, which is the No. 2 bestselling individual tablet on the market, is selling for $199. It is unclear if the new smaller Apple tablet will match that price. Estimates for a smaller iPad are closer to $299, IndyStar.com reports.
"People would spend $299 for an iPad over a Kindle Fire," said IDC analyst Tom Mainelli.
The new iPad Mini is expected to be manufactured at the Foxconn factory in China, where iPhones and current iPads are made. IDC reports that by 2016 there may be 222 million tablets shipped worldwide, and 61% of those will be sold by Apple.
According to PC World, this new approach by Apple will cause cannibalization, according to Brian White, an analyst with Topeka Capital Markets.
"We would expect the cannibalization of the current iPad by the 'iPad Mini' to be relatively minor and potentially in a range of just 10-20 percent, while the market opportunity could eventually be larger for the 'iPad Mini' given the growth trends in developing countries," White writes in a research note released Thursday.
"It's better that Apple cannibalizes itself than anyone else cannibalizes Apple," said Bob O'Donnell, IDC's research vice president for clients and displays. "You want your customers to use your stuff."
If cannibalization gives Apple total domination of the market, then it will be accepted. "I think Apple likes owning a market," O'Donnell adds.
O'Donnell said a reason why $249 iPad Mini present a strong challenge to $199 tablets are "because people would rather pay a few bucks more and get an iPad than to get something else."