Rumour : Apple Working on 7-inch iPad 2 Tablets?

We've heard it before and dismissed it; now rumours about a smaller version of the iPad 2, one with a 7-inch screen have resurfaced again.

A source told Ilounge that Apple is toying with the idea of a 7-inch iPad despite the company's CEO, Steve Jobs, having clearly stated that this form factor was dead on arrival as it is not convenient for high resolutions.

However, Steve Jobs did say in the past that he was not convinced that people would want to watch movies on a "tiny little screen" before the launch of the iPod Touch.

Ilounge specifically mentions that a key iPad, iPhone and iPod component supplier has been asked to provide a part for use in a seven-inch iPad; that could well be the screen the enclosure, the motherboard or any other component that is physically different on a smaller iPad.

The product, it is understood, is still under development and may or may not be pushed into production as the iPad 2 mini. Of course, rumours of smaller iPad mini have been around for quite a few months now with Digitimes reporting back in July, 5.6-inch and 7-inch models coming soon.