Rumors of a new, smaller iPad have been flying fast and furious lately. While this isn't the first time we've heard noise about such a device, recent reports from normally reliable news sources like Bloomberg and the Wall Street Journal, as well as the recent introduction of the Nexus 7, have lent this round of speculation some extra credence. If the Nexus 7's sales are as good as its critical reception has been, it could be enough to convince people that a seven- or eight-inch tablet can succeed when done well.
There has been plenty of reason to doubt a smaller iPad's existence: nearly every write-up about it includes some mention of Steve Jobs' infamous "you'll have to sandpaper your fingers to use a smaller tablet than the iPad" comments, and his vehement opposition to the idea of a smaller-than-original iPad was enough to convince me it wasn't happening in the short-term. Now, the presence of seemingly legitimate sources for the swirling rumors, as well as Joel Bernstein's excellent analysis of the smaller iPad's size (which explains how the touch points in properly designed apps on a 7.85" iPad would be about as large as properly designed apps on a 3.5" screen), have convinced me otherwise.
Questions still remain: what kind of hardware would a smaller iPad use? How much would it cost? How would it fit into Apple's existing iOS lineup? I'll look at Apple's current lineup, its past behaviors, and the facts about the Nexus 7 in order to give you what I think are best answers to those questions.