If Daring Fireball's John Gruber is to be believed Apple is planning to launch a small, low-budget tablet that runs at the same 1024 x 768 resolution as the iPad 1 and 2.
When asked about a 7-inch tablet on an episode of The Talk Show podcast, Gruber said "Well, I don't know. What I do know is that they have one in the lab. A 7.85 inch iPad that runs at 1024×768. It's just like the regular iPad shrunk down a bit", reports TechCrunch.
In October 2010, Steve Jobs had famously quashed all rumours of a 7-inch tablet as the size isn't suitable for iPad applications. With Jobs gone, Apple insiders might be mulling about a budget tablet to tap a different section of consumers. Right now, the 9.7-inch new iPad, along with the original iPad and iPad 2, comes with a hefty price tag.
Though it is improbable that Apple will come out with a small iPad, if it happens it will surely be portable enough to be carried in the pocket and used with one hand - a problem many iPad users complain about.