Rumor Report: Apple's Upcoming iPad Mini Will Crush the Competition

A report this week by market research firm IHS iSuppli foresees record sales of tablets in the future. Specifically, IHS said it expects unit sales to grow 85% to around 126 million devices in 2012, with Apple's (NAS: AAPL) iPad grabbing 61% market share. If they took a poll on how many investors were surprised by this news, it wouldn't be many. However, something that may truly amaze Mac maniacs is the idea that Apple is developing a new touch technology for the October launch of an iPad Mini.

Show and tell
If the rumors are finally true, the most valuable company in the world may launch a 7.85-inch version of its popular iPad tablet this fall. This is another smart move by the Mac maker, and the timing couldn't be better. Tablets equipped with Microsoft's (NAS: MSFT) Windows 8 software are set to launch in time for the 2012 holiday season, along with an onslaught of other PC-tablet hopefuls.

The new entry-level iPad could deliver a devastating blow to rival (NAS: AMZN) and others in the tablet space. Research In Motion (NAS: RIMM) tried its hand in the tablet market with the launch of its dirt cheap 7-inch BlackBerry PlayBook last year, which proved that competitive pricing doesn't guarantee success. The BlackBerry maker even tried to revamp its operating system, releasing a second PlayBook device only to see sales yet again disappoint.

RIM wasn't alone, either. Barnes & Noble (NYS: BKS) made countless attempts to crack the iPad code of conquest. The book retailer's latest Nook product fell flat, despite its competitive $199 price tag, which was meant to help it compete with the Kindle Fire. Unfortunate as it was for the other companies, Amazon's Kindle Fire was the only iPad alternative to hold a candle to Apple's dominance in the tablet market.

Gunning for No. 1
However, that could change if the rumors about the iPad Mini prove to be true. According to Digitimes, Apple's new miniaturized tablet will use what's known as "G/F2" thin-film touch technology, giving it a thinner design compared with the existing iPad. And if industry sources are on the right track, the iPad Mini could cost between $200 and $250 a pop -- aligning it with Amazon's Kindle Fire, which sells for $199.

The Kindle Fire seized some of the tablet market last year, decreasing Apple's stake to 55.1%. But a new and cheaper iPad could cause Apple to trample the competition in its climb to the top. If the product comes to fruition, I have no doubt it will be a win for Apple.

Apple appears to be set to dominate the world, but it won't all be smooth sailing for the iDevice giant. Read all about Apple's opportunities and risks in this premium research report on Apple from The Motley Fool. With expert insight, it could help you make a smarter investing decision about whether you should own the stock.

At the time this article was published Fool contributor Tamara Rutter owns shares of Apple and Follow her onTwitter, where she uses the handle@TamaraRutter, for more Foolish insights and investing advice. The Motley Fool owns shares of, Apple, and Microsoft.Motley Fool newsletter services have recommended buying shares of, Apple, and Microsoft, as well as writing puts on Barnes & Noble and creating bull call spread positions on Apple and Microsoft. The Motley Fool has a disclosure policy. We Fools don't all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. Try any of our Foolish newsletter services free for 30 days.

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