Report: Apple prepping larger iPad with 12.9-inch screen

Apple (NASDAQ: AAPL) is working with suppliers to produce a new, larger version of its iPad tablet with a screen that measures 12.9 inches diagonally, according to a Bloomberg report.

The report, citing unnamed sources, said that Apple's iPad suppliers will start production of the new device by the first quarter of 2015. Apple's standard iPad has a 9.7-inch display and the iPad mini has a 7.9-inch screen. In July, the Wall Street Journal reported that that Apple was working on a larger iPad with a screen slightly smaller than 13 inches.

Apple declined to comment, according to Bloomberg.

The report noted that Apple has been working with suppliers for at least a year to develop a new range of larger touch-screen devices, and Apple CEO Tim Cook is looking shake up the company's iPad line. The company is reportedly working on new versions of its iPad and iPad mini for the holiday shopping season, and sales growth is important for the company since the iPad produces more revenue for Apple than any other product except the iPhone.

Apple's iPad sales have fallen for the past two quarters. The company sold 13.27 million iPads during its most recent quarter, below analysts' expectations of around 14.5 million. In the same quarter last year, Apple sold 14.6 million iPads.

Apple's quarterly iPad shipments since the company first released the device in 2010

However, in an interview with Re/code, Apple CEO Tim Cook said he is optimistic about where Apple's tablet business is heading.

"We couldn't be happier with how we've done with the first four years of the iPad," he said, and added that, "I'd call what's going on recently a speed bump, and I've seen that in every category."

Cook said in July that iPad sales met Apple's expectations but the company realized they didn't meet many analysts' expectations. He said iPad sales were hurt in part by a reduction in channel inventory and partly by "market softness" in certain markets. "For example, IDC's latest estimate indicates a 5 percent overall decline in the U.S. tablet market, as well as a decline in the Western European tablet market in the June quarter," he said.

Research firm IDC thinks the tablet market will grow in 2014 compared to 2013 but at a slower pace than it previously forecasted, with a maturing market, stabilizing prices and a decline in low-cost tablets all contributing to the weaker growth.

Meanwhile, even as Apple is reportedly working on a bigger-screen iPad, the tablet market has seen a boom in lower-end models running Google's (NASDAQ: GOOG) Android platform. According to research firm Gartner, Android was the top tablet operating system in 2013, with 62 percent share, compared with Apple's 36 percent share. That was down from Apple's 53 percent share in 2012.

Apple is also hoping that it can increase its iPad sales to enterprise customers. Under a teaming announced in July, Apple and IBM will collaborate on creating mobile applications for specific enterprise solutions. IBM will also sell iPhones and iPads to its business customers.

Apple is also reportedly prepping to announce two new iPhone models, one with a 4.7-inch screen and another with a 5.5-inch display. As the Journal notes, the introduction of a larger-screened iPhone could blur the line between the iPhone and the iPad mini, while a larger iPad could start encroaching on the terrain Apple has traditionally reserved for its Mac computers.

For more:
- see this Bloomberg article
- see this CNET article
- see this Re/code article 
- see this WSJ article (sub. req.)

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NPD: U.S. Tablets using cellular connections increase 46% in 2013 to 10.4M