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Apple is widely expected to announce a new iPad early next month, tentatively known as the iPad 3. If recent rumors are to be trusted, it will likely look and feel very similar to the iPad 2 but with a faster A6 processor, improved graphics, support for Siri, improved cameras, and an ultra high resolution display running at 2048 x 1536. That's all pretty much standard fare (except for the higher-resolution display), but according to the Wall Street Journal, Apple is also working on a smaller version of its popular tablet.
The paper cites people familiar with the matter and close to Apple's suppliers, who have hinted at the existence of a smaller iPad with a screen size of around eight inches. It supposedly packs the same 1024×768 resolution as the iPad 2, which would bump the pixel per inch (PPI) count from 132 to 160 on the smaller tablet.
This new report is in line with earlier rumors of a 7.85-inch iPad with the same display resolution as the iPad 2. Although the Wall Street Journal says Apple is not far along in the build process, it also notes that the company works with suppliers to test new designs all the time, so the existence of an 8-inch iPad doesn’t necessarily mean it will ever see the light of day.
An "iPad mini" has been rumored for quite some time, and according to the report Apple has played with various tablet sizes in the past, despite its late founder Steve Jobs’s public disdain for smaller tablets.