Are The iPad Mini Rumors Finally Real?

They're back! Well, I guess, in fairness, they never really went anywhere to begin with.

For the past couple of years, there has been a steady hum of speculation that Apple (NAS: AAPL) would release a smaller iPad, now frequently referred to as the "iPad Mini." In recent months, this hum has now reached a fever pitch, and we're no longer talking about dubious rumblings from the Far East supply chain. Multiple credible outlets are now throwing their hat into the ring with sources tipping Apple's hand.

Exhibit A
NPD DisplaySearch analyst Richard Shim told CNET that there are 7.85-inch panels going to Apple. Shim's supply chain sources indicate that those panels are tablet bound, but that production hasn't yet begun; but it's imminent, and everything is locked and loaded. He even claims to know various details about the production lines, including things like how many panels will come out of each sheet of glass.

It's worth pointing out that Shim is also the display supply chain analyst that noticed high-resolution laptop displays floating around out there in 13.3-inch and 15.4-inch varieties just a month before Apple unveiled its new lineup of redesigned MacBook Pros with Retina displays sporting the exact resolutions Shim mentioned.

Exhibit B
Bloomberg is chiming in also, citing "two people with knowledge of the plans," that say the device will be launched by the end of the year. The report says the display would be between 7 and 8 inches, but won't feature a high-resolution Retina display, in order to keep down costs and target a lower price point. Instead, it would feature the same resolution as the first and second iPad, at 1024 x 768.

October is a tentative time frame for an announcement, which is also when the company's sixth-generation iPhone is widely expected. You can't help but wonder if Apple will use its favorite "one more thin" habit to announce the smaller tablet.

Exhibit C
Last but not least, we have the almighty Wall Street Journal separately corroborating the claims, saying that mass production could begin in September, as component suppliers prepare to ramp up. Its sources also say it will have a screen size less than 8 inches. The WSJ also reported in February that Apple was testing such a device, although it may or may not ever reach the market.

Putting all the pieces together
Combined, these rumblings indicate a 7.85-inch iPad Mini with a 1024 x 768 resolution, which would put its pixel density at 163 pixels per inch, or ppi. It may enter production in September in time for an October launch.

Most expect pricing to be between $250 and $300, approaching (NAS: AMZN) Kindle Fire and Google (NAS: GOOG) Nexus 7 territory, just as the search giant unveiled its own tablet last month. Sterne Agee analyst Shaw Wu said the move would be "competitors' worst nightmare." Pacific Crest analyst Andy Hargreaves estimates that Apple could move 35 million of them at $299 in fiscal 2013, although there would be some cannibalization of its larger brethren.

Tablet moves
Using the same resolution is a smart move, because it would guarantee app compatibility with existing apps with almost no extra effort, and the screen would be sharper than older iPad models. Although at 163 ppi, its pixel density would be less than its two most important rivals: the Kindle Fire at 169 ppi and the Nexus 7 at 216 ppi.

In that case, Apple would need to rely on other areas for competitive advantages, like a wider availability of tablet-optimized apps, or higher build quality with it being thinner and lighter, especially if it hopes to charge a slight premium for the device.

Steve Jobs was famously against 7-inch tablet form factors, going as far as to even call them "dead on arrival." Importantly, CEO Tim Cook has said that one of the last things that Jobs told him was to never dwell on "what Steve would do." Rather, Cook should focus simply on what's best for Apple.

In this case, the Kindle Fire's success is clear evidence that there's a market for 7-inch tablets worth tapping, and Apple moving down-market to put the heat on 7-inch rivals would certainly be best for Apple.

An iPad Mini would further invigorate Apple's monstrous momentum and leave little for competitors, showing how much room Apple still has to run. Learn more about Apple's opportunities, as well as the impediments to getting there, in our brand-new premium Apple research service. Thanks to Apple's international sales, which now comprise nearly two-thirds of revenue, the American company is prepared for world domination. It's not alone, and here are 3 more.

At the time thisarticle was published Fool contributorEvan Niuowns shares of Apple and, but he holds no other position in any company mentioned.Click hereto see his holdings and a short bio. The Motley Fool owns shares of The Fool owns shares of Apple. The Fool owns shares of Google.Motley Fool newsletter serviceshave recommended buying shares of Google,, and Apple.Motley Fool newsletter serviceshave recommended creating a bull call spread position in Apple. The Motley Fool has adisclosure policy. We Fools may not all hold the same opinions, but we all believe thatconsidering a diverse range of insightsmakes us better investors. Try any of our Foolish newsletter servicesfree for 30 days.

Copyright © 1995 - 2012 The Motley Fool, LLC. All rights reserved. The Motley Fool has a disclosure policy.