Apple is building a miniature iPad to rival Amazon's Kindle Fire and Google's new Nexus 7 tablet, as a battle royal over tablet computers shapes up among technology's biggest names.
Apple, the world's most valuable company, is moving toward mass production of smaller iPads, according to industry tracker DisplaySearch. The move comes as Amazon quietly preps its next Kindle Fire. Both are expected to be released ahead of the holidays.
Apple spokeswoman Trudy Muller declined to comment.
The race to build book-size tablets is driven by consumer desire for greater portability. But the world is going bonkers for tablets of all shapes and sizes. IDC forecasts that by 2016 there will be 222 million tablets shipped worldwide, and 61% of those will be sold by Apple.
Google just last week launched its 7-inch Nexus 7, available for pre-order, and expanded the number of movie, TV, music and e-books available from its online Google Play store. Meanwhile, Microsoft last month unveiled its Surface tablets sporting a supersize 10.6-inch screen vs. the iPad's 9.7-inch one.
"There's going to be a ton of choices for consumers by the fourth quarter," says IDC analyst Tom Mainelli.
Yet each company - Apple, Amazon, Google and Microsoft - courts tablet buyers for different reasons, besides selling the devices themselves, analysts say. Microsoft wants its profitable Windows operating system, built into the Surface tablets, to live on among the mobile masses.
Google, which depends on ad revenue, wants the Nexus 7 to be a magnet for more ads.
Amazon subsidizes its tablet and uses it mainly as a way to sell books and other products from its online stores. And Apple uses its popular iTunes Store as a lure to sell its iPad at a premium.
Apple's smaller iPad, sporting a 7.85-inch screen, is expected to be assembled in time for an October stage debut. "We're starting to see more concrete evidence that it's going to be produced" in that time frame, says DisplaySearch analyst Richard Shim.
Apple's popular iPad scaled down from its current screen size would be a potent rival to other small tablets, including Barnes & Noble's Nook Color. A mini iPad would also add more luster to the evolving market for lower-cost media-consuming tablets that fit in the hand.
The Kindle Fire is the No. 2 best-selling individual tablet on the market. Samsung actually sells more tablets overall but has no individual unit as hot as the Fire.
The next Kindle Fire, which gains a camera, is going into "mass production now" and is expected to be very similar to the Nexus 7, says Shim. "They're still in the early stages of their growth."
Whether a smaller Apple tablet would match the lower $199 price point of the Kindle Fire remains to be seen. Estimates for a smaller iPad are closer to $299.
"People would spend $299 for an iPad over a Kindle Fire," Mainelli says.
The mini iPad is expected to be manufactured at the Foxconn factory in China, where iPhones and current iPads are made. But it isn't expected to share the higher-resolution "Retina display" of the newest iPad. Few other details are known.