It seems that Apple has taken notice of the enormous success of the cheaper, smaller Amazon Kindle Fire tablet, and is now planning an 8-inch iPad to compete with it directly.
Although Apple is known for making quality products, one thing they are not is cost effective. iPads normally retail for around $499 so Amazon seems to have carved out its new place in the tablet market with the Kindle Fire by pricing it at $199.
It also sports a 7-inch display, making it a convenient device to carry around. The iPad 2 features a slightly larger screen at almost 10 inches, so Apple could be working on something more portable and also more cost effective to go head to head with Amazon's device.
Samsung's Galaxy line also features an 7-inch version that is more on the high-end level. Apple could be sizing them up as well.
The Wall Street Journal first reported yesterday that Apple is testing what could be an 8-inch iPad in its labs.
"Officials at some of Apple's suppliers, who declined to be named, said the Cupertino Calif.-based company has shown them screen designs for a new device with a screen size of around 8-inches, and said it is qualifying suppliers for it," wrote the publication.
WSJ has stated that it is not sure what version Apple will end up releasing, but it does claim to know that an 8-inch model is in fact being tested by the company at this time.
The publication's sources claim that the 8-inch iPad's screen would pack a 1024x768 display, which is quite similar to the iPad 2. It is also rumored to be an LTE device. WSJ released a report Tuesday morning, stating that the next-gen iPad would in fact be an LTE device.