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'iPad Mini' to take on Kindle Fire?

An iPad to take on Amazon's Kindle Fire? While Steve Jobs dismissed the idea of an alternative iPad in the past, the tablet market is changing rapidly with the debut of the $199 Fire.

Rumors are starting to fly that Apple may be working on an iPad to take on Amazon's already popular Kindle Fire.

7-inch Amazon Kindle Fire.
7-inch Amazon Kindle Fire. Amazon

An industry source who speaks with the Asia-based tablet supply chain told CNET that chatter is picking up for a 7.85-inch Apple tablet. Maybe not coincidentally, that's only a bit larger than Amazon's $199 tablet that's will ship on November 15.

Other reports, however, say that "Mini" doesn't necessarily refer to the size but simply the lower price point, possibly the mid-$200 range.

The late Apple CEO Steve Jobs summarily dismissed the notion of a 7-inch tablet during an earnings conference call in October of last year.

"Apple has done extensive user testing and we really understand this stuff...There are clear limits on how close you can place things on a touch screen, which is why we think 10 inch is the minimum screen size to create great tablet apps," Jobs said at the time.

"It's meaningless unless your tablet also includes sandpaper, so that the user can sand down their fingers to around one quarter of their present size," he added.

Jobs' protests notwithstanding, at the time more than a few analysts said Apple was close to bringing out a product.

And the tablet market is changing. Apple may have to change along with it. Smaller 7-inch and 8.9-inch tablets from Samsung, HTC, RIM and others are prevalent now. And if the Kindle Fire approaches the iPad in sales--which analysts say is possible--that would make smaller, cheaper tablets a category that rivals the 10-inch iPad in popularity.