Just a couple of days after Apple sent invitations to an event scheduled for next Wednesday for the release of its third generation iPad, an Asia-based report has incited another fresh round of rumors surrounding the device.

At the scheduled event on March 7, Apple is expected to unveil two iPad 3 models - a 16GB version and 32GB version - which will be accompanied by a cheaper 8GB iPad 2 model as well, Taipei-based DigiTimes reported in a story dated Thursday.

However, the report didn't explain why the company would dump its existing high-capacity 64GB iPad model.

Sources within Apple's upstream supply chain revealed that the Cupertino tech giant will unveil the smaller capacity iPad 2 allowing the tablet PC series to cover different segments and to defend against Windows 8-based tablet PCs, said a DigiTimes report.

The report also claimed that Apple has been aggressively placing orders for the iPad 3 and the shipments in the first quarter of 2012 are expected to double from the original estimates.

What about the price? Another DigiTimes report said that Apple is expected to release the cheaper 8GB iPad 2 for $349-$399. The company has reportedly lowered the price of the 16GB iPad 2 to $449.

First Ever Smaller-Sized iPads Due Later This Year?

The second DigiTimes report fueled the rumor mill even further by saying that Apple's iPad supply chain has started delivering samples of smaller 7.85-inch iPads for verification. The production of the smaller models is likely to begin in the third quarter of 2012, the report added.

The planned launch of the 7.85-inch iPad is apparently to take on Amazon's US$199 7-inch Kindle Fire as well as a comparable model from Barnes & Noble, although Apple already took up nearly a 60 percent share of the tablet PC market in 2011, the report said, citing industry sources.

Considering the popularity of Amazon's $199 Kindle Fire tablet, the price of the smaller iPad could go as low as $249-$299, the report said. In addition, the 7.85-inch iPad is expected to have the same 1,024x768 resolution of the iPad 2, meaning that apps don't require any changes in order to accommodate the smaller screen, CNET reported.

The report also said that the rumor about the 7.85-inch iPad corresponds to some earlier reports that cited sources saying that Apple might be working on a mini iPad to take on Amazon's Kindle Fire.

In October last year, an industry source who spoke with display manufacturers in Asia told CNET that chatter for a 7.85-inch Apple tablet was picking up.

The idea of a mini iPad does puzzle Apple observers since the late Apple CEO Steve Jobs himself dismissed that notion during an earning conference call on Oct. 18, 2010.

One naturally thinks that a 7-inch screen would offer 70 percent of the benefits of a 10-inch screen...this is far from the truth. Seven-inch screens are 45 percent as large as an iPad, CNET quoted Jobs as saying. This size isn't sufficient for making great tablet apps.

Apple confirmed on Tuesday via an invitation to media organizations that it will unveil the iPad 3 on March 7 in an event due to begin at 10 a.m. Pacific Time (1 p.m. ET) at the Yerba Buena Center for Arts in San Francisco. The official invite says, We have something you really need to see. And touch.

The iPad 3, or whatever Apple would prefer to name it, is widely believed to feature a Retina Display with a resolution of 2048 x 1536 (264dpi), a faster processor, 4G LTE data speed, much improved camera and the voice recognition personal assistant Siri.

Rumors have also suggested that the new iPad will be slightly thicker than the iPad 2 and might ditch the traditional home button.

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