Apple has been working on iPads of various shapes and sizes since 2009, says Sterne Agee analyst Shaw Wu in a note this morning.
He was commenting on the increasing chatter that Apple is thinking about releasing an iPad mini, that would only be 7.85-inches big.
He says Apple has been playing with devices in all sorts of sizes from 4-inches to 12-inches, so the rumors aren't that shocking.
He doesn't know if Apple will release an iPad mini, but he thinks it would be a smart move. Here's why:
iPad mini Would Be Competition's Worst Nightmare. From a competitive standpoint, we believe an iPad mini with a lower price point would be the competition's worst nightmare. Most of them already have a tough enough time competing against the iPad 2, as well as the new iPad with their $399 and $499 starting price points. So far, only AMZN has had modest success with its Kindle Fire at $199. We believe a lower priced iPad mini would make it even more difficult for the competition to gain traction.
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