Apple releasing 7.85-inch mini iPad in late 2012

Apple is preparing to launch a smaller screen iPad in late 2012 as a response to competition from products produced by Amazon and Samsung, a report has claimed.

DigiTimes quoted "sources in the supply chain" as claiming that the US firm is working on a 7.85-inch screen iPad for release "prior" to the fourth quarter of next year.

The website said that the 'mini' tablet would be launched in addition to the rumoured full-size iPad 3, which is expected to be announced at the end of first quarter.

Research has suggested that global shipments of tablet computers will reach 60m units in 2011, of which Apple holds a dominant 70% share.

However, the firm is facing increasing competition from Samsung's range of Galaxy tablets, covering models featuring seven-inch to 10.1-inch screens, but also Amazon's already popular Kindle Fire, a seven-inch screen tablet available for just $199 (£127).

DigiTimes's sources have indicated that Apple is to release its next-generation of iPads in the first quarter of 2012 to maintain its position as the market leader.

The website said that Apple has already purchased 7.85-inch touchscreens from LG Display for the 'mini' iPad, and it will soon buy further panels from AU Optronics (AUO).

Its sources claimed that the Cupertino-based firm will most like start production on the smaller tablet at the end of the second quarter of 2012.