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This is a more explicitly formed version of the "much faster networking" rumor we played with earlier. It's possible that there will be some 4G/LTE networking, in particular because of the larger apps, but we'd expect this feature to be the crowning achievement of the next iPhone, not a side-option for the iPad.
The Magic 8 Ball: The Magic 8 Ball reads, "Very doubtful."
Update: 7.85-inch iPad due in Q3
Here's another funny variant. Rumors tend to mate with other rumors, and produce little rumor offspring. In this case, the "there will be three iPad models" rumor and the "there will be a 7- or 8-inch iPad rumor" have mated, to become the "there will be a 7.85-inch iPad due in Q3".
The Magic 8 Ball: The Magic 8 Ball reads, "My reply is no". It's important to read the Magic 8 Ball very carefully. While the Magic 8 Ball didn't think there would be a 7- or 8-inch iPad, it definitely doesn't think it'll come out in Q3. Q3 is iPhone time.
Original rumor: There might be a 7-inch or 8-inch screen. Given that the Kindle Fire has clarified the mid-screen market size, many of us think it only makes sense that Apple introduce a smaller-size model. Will they or won't they? I'm guessing no, but we'll find out soon.
If they do, there's a new high bar. As ZDNet's Matthew Miller says, Forget Kindle Fire. PlayBook is now the best low-cost tablet. The Blackberry PlayBook 2.0 update takes a good 7-inch tablet and makes it excellent.
I know, BlackBerry. That's tough to believe all on its own.
The Magic 8 Ball: The Magic 8 Ball reads, "My sources say no". We haven't heard a single rumor about a smaller case or shell.
Image: This images show an iPad 2 at 9.5-inches diagonal (left). The middle one is approximately 8-inches and the one on the right is approximately 7-inches.
This rumor has it that there will be pricier models, $579 for 16GB, $699 16GB with 3G, and $779 with 64GB, $899 with 64GB and 3G.
The Magic 8 Ball: The Magic 8 Ball reads, "Don't count on it". Apple rarely raises prices on its model bumps. Then again, there's this rumor...