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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...
Update: The rumor mills are just dying to see a cheap iPad to compete at the lower end. Given that bottom-end 16GB iPad 2's are now going for $429 from many resellers, and you can buy refurbished iPads straight from Apple for as low as $299, it's possible we'll see a lower-priced iPad 2 model (especially since the current iPad display is a known commodity, when it comes to supply chain issues).
The Magic 8 Ball: The Magic 8 Ball reads, "Signs point to yes". You'll probably be able to get a cheaper iPad, but whether there's a storage reduction or not is anyone's guess.
In light of both the Kindle Fire and BlackBerry Playbook 2.0, there are some rumors that there might be a lower-cost unit. Given that Apple is now minting money faster than the mints, we have our doubts they want to play in the Kindle Fire ghetto. But Apple has been known to play their iPods to every niche, so there is a possibility. We've seen reports of up to three models, with one starting at about $299.
The Magic 8 Ball: The Magic 8 Ball reads, "Very doubtful". Apple isn't feeling any competitive pressure from the low end, and if you want a cheap iOS device, buy an old iPad or iPhone.