The Wall Street Journal reported Monday that component suppliers had begun production of the smaller Apple tablet as of this month.
Apple apparently senses strong demand will greet the 7.85-inch tablet that is expected to compete with the Amazon Kindle Fire and other smaller tablets, which are sometimes called digital readers.
Samsung Electronics has entered the sector with a 5.3-inch Galaxy Note. The Amazon Kindle Fire device is 7 inches.
Apple already makes the 9.7-inch iPad. It is expected to unveil the smaller version this month.
"It makes sense for market leader Apple to extend its dominance in tablets with a smaller tablet," said Diana Wu, an analyst with Capital Securities.
RBS analyst Wanli Wang said the challenge will be hitting the correct price. "IPad mini will be a big hit if Apple prices it below $300," Wang said.
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