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Will the iPad mini be a nightmare for Google, Microsoft, and Amazon.com?

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Although two 7-inch Android tablets, the Nexus 7 (made by Asus for Google), and the Kindle Fire 2, still only rumored, are reportedly coming very soon, Apple is preparing to steal their sub-10-inch tablet thunder. Bloomberg is reporting about something we've been discussing here for months: a 7.85-inch iPad mini (1, 2, 3).

Reports have been floating about an iPad mini for months, but the rumor has been around since the first iPad, after users complained about the "heft" of the device. However, at the time, then Apple CEO Steve Jobs had made his famous "tablets with a screen smaller than 10-inches in size are DOA" speech (paraphrased).

The report seems to confirm much of the information in earlier rumors: a screen that is 7 inches to 8 inches diagonally and a possible launch announcement by October, with a non-retina display. The sources (of course) requested anonymity in the matter.

Shrinking the iPad would undercut the main idea behind Android tablets with smaller screens: price. Although it's possible that the iPad mini could still be priced higher than competing 7-inch Android tablets, the iPad's dominance among tablets and the so-called "halo effect" could mean that those lower prices won't resonate with consumers.

Shaw Wu, an analyst at Sterne Agee & Leach Inc said, "It would be the competitors’ worst nightmare. The ball is in Apple’s court," adding that “This isn’t like the old days, when it cost thousands of dollars more to buy an Apple product. Fifty or a hundred bucks wouldn’t be enough to make someone switch [from an iPad to a competing device]."

Microsoft's newly announced Surface tablets may be less affected by the iPad mini than the Nexus 7 and Kindle Fire 2 (or other Android tablets). The Surface tablets - at least the Windows 8 Pro version) - would be most attractive to consumers looking for a full Windows experience in a tablet. The Windows RT versions, which won't run existing Windows software ... we'll have to wait and see.

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