Apple (NASDAQ:AAPL) is preparing for a fall launch of a smaller iPad tablet, according to multiple reports, which could put Apple in place to compete more directly with Google's (NASDAQ:GOOG) Nexus 7 and Amazon's Kindle Fire.
Citing unnamed sources, both Bloomberg and the Wall Street Journal reported that Apple is in the final stages of preparing for the launch of the device, which will likely have a 7-inch screen like those of its smaller-sized competitors. The iPad's screen has been 9.7-inches diagonally since it was introduced in 2010.
According to Bloomberg, the smaller iPad will not have the Retina high-definition display that the latest iPad has. The Journal reported that Apple's component suppliers have been told to ramp up for mass production of the smaller tablet in September. Apple declined to comment.
Apple has sold 67 million iPads since the device went on sale including 11.8 million in its last quarter. The newest iPad has LTE capabilities and is offered by Verizon Wireless (NYSE:VZ) and AT&T Mobility (NYSE:T) in the United States.
A smaller iPad could pose significant challenges to Google and Amazon, especially if Apple prices the device near the $199 point that Google and Amazon have targeted. Apple's content and application ecosystem and strong presence in the tablet market could give it an advantage. According to Gartner, Apple still controls 61 percent of the tablet market. "It would be the competitors' worst nightmare," Sterne Agee analyst Shaw Wu told Bloomberg. "The ball is in Apple's court."
The shift to a smaller tablet would be something of a reversal for Apple. The late Apple CEO Steve Jobs famously dismissed the idea of a 7-inch tablet. He said the smaller screen size hurt the user experience and the way apps were presented.
"The reason we [won't] make a 7-inch tablet isn't because we don't want to hit [a lower] price point," Jobs said on an October 2010 Apple earnings conference call. "It's because we think the screen is too small to express the software. As a software driven company, we think about the software strategies first."
- see this Bloomberg article
- see this WSJ article (sub. req.)
- see this AllThingsD article
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