By Mike Snider, USA TODAY

Apple is putting the finishing touches on a smaller iPad tablet with a display measuring less than eight inches that is expected to be unveiled in October.

According to Bloomberg and The Wall Street Journal, Apple will launch a smaller tablet by the year's end. The new more portable, cheaper device would target competition in the 7-inch display category from Amazon's Kindle Fire and Google's new Nexus 7 tablet and the Surface tablet from Microsoft.

The Wall Street Journal cited component suppliers in Asia that say Apple has them preparing for production of a smaller tablet in September. The product, sources told Bloomberg, won't have the high-definition Retina display that's on the latest iPad model.

Rumors about a smaller iPad -- the current models have 9.7-inch displays -- have circulated for years. Priced at least $200 to $250 below the current $499-and-up full-size iPad, the mini-iPad would compete with Amazon's Kindle Fire and the newly launched Nexus 7 tablet from Google.

Those tablets don't come close to the iPad on screen resolution or volume of available apps, but at $199 the Kindle Fire has surged in popularity. And the Nexus 7, which is on pre-order now for shipping in 2 or 3 weeks, is a slick Android tablet with the newest version of Google's mobile operating system. It also starts at $199.

Bloomberg quoted Sterne Agee & Leach Inc. analyst Shaw Wu who said the mini-iPad "would be the competitors' worst nightmare. ... The ball is in Apple's court."

Pacific Crest analyst Andy Hargreaves predicted earlier in the week that Apple would bring a 7.85-inch iPad Mini to market in the fourth quarter of 2012, with an 8 Gigabyte model at $299 and a 16GB model at $399. He estimated that Apple would sell 10 million smaller iPads in its first quarter available and 35.2 million in its first year.

Interestingly, Apple co-founder Steve Jobs didn't think much of small tablets. "We don't think you can make a great tablet with a 7-inch screen," Jobs said in a 2010 earnings call. "The 7-inch tablets are tweeners, too big to compete with a smartphone and too small to compete with an iPad."

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