Apple said to have mini-iPad in the works

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(BLOOMBERG) — Apple Inc. plans to debut a smaller, cheaper iPad by year-end, two people with knowledge of the plans have said, to help maintain dominance of the tablet market as Google Inc. and Microsoft Corp. prepare competing hand-held devices.

The new model will have a screen that’s seven to eight inches diagonally, less than the current 9.7-inch version, said the sources, who asked not to be identified because Apple hasn’t made its plans public. The product, which Apple may announce by October, won’t have the high-definition screen featured on the iPad that was released in March, one of the sources said.

A smaller, less expensive iPad could undercut the ambitions of Google, Microsoft and Amazon.com Inc. to gain traction in the advancing tablet market, said Shaw Wu, an analyst at Sterne Agee & Leach Inc. The new device will probably have a price closer to Google’s Nexus 7 tablet and Amazon’s Kindle Fire, both of which have 7-inch screens and cost $199.

“It would be the competitors’ worst nightmare,” Wu said in an interview. “The ball is in Apple’s court.”

Trudy Muller, a spokeswoman for Cupertino, California-based Apple, declined to comment.

Since the iPad went on sale in April 2010, Apple has dominated the tablet market, which is predicted by DisplaySearch to reach $66.4 billion this year. Apple has 61 percent of the market, according to Gartner Inc.

Apple’s rivals are eager to gain a toehold. Google said on June 27 that it will sell a tablet-style device called the Nexus 7. Last month, Microsoft unveiled a tablet called Surface that will have a similar screen size as the current iPad. And Amazon is expected to release a new version of the Kindle Fire later this year.

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