Apple Planning 7.85-inch Mini iPad for 2H 2012?

While everybody is waiting with anticipation for the upcoming iPad 3, expected to hit the market in around March, industry observers are proposing Apple could announce a second iPad release next year.

In addition to the high end tablet which is firing up technology blogs with rumours of its vastly improved display and other impressive features, Apple may hit the market with a small tablet to appeal to entry level users.

The rise of smaller Android tablets which have arrived on the market with great success, has certainly not gone unnoticed by Apple. In particular Amazon's Kindle Fire with its portable size and appeal to price aware customers, is already considered as a strong challenger to Apple's domination on the tablet market.

Analysts, like DisplaySearch's Richard Shim, feel it is likely Apple will take a more hands on approach to facing the challenge of 7-inch tablets. "Apple is also expressing interest in making a mini-iPad based on a 7.85-inch screen. That would come later in 2012, possibly in the second half sometime."

Tim Cook recently suggested that ultimately the Kinde Fire's success is a good thing for Apple, as it will provide an entry to the tablet market for many customers who will later look to upgrade to Apple's 'superior' slabs.

Though this may carry a degree of truth, why would Apple want to miss out on the large level of sales a lower-end tablet would undoubtedly bring, which would also contribute towards the same end?