Such sales cannibalization of existing iPad models would be minor and would be more than offset by the rewards to Apple for expanding its line, according to Brian White, an analyst with Topeka Capital Markets, who has been beating the drum about a smaller iPad since last fall when he coined the term iPad Mini for the gadget.

"We would expect the cannibalization of the current iPad by the 'iPad Mini' to be relatively minor and potentially in a range of just 10-20 percent, while the market opportunity could eventually be larger for the 'iPad Mini' given the growth trends in developing countries," White writes in a research note released Thursday.

White maintains that the Mini would be a hit in developing countries, like China. In the developed world it would also be popular with price-sensitive consumers, those who find the smaller form more convenient, educators who will like the price -- expected around $250 -- and younger children who will find a smaller device easier to handle than a 10-inch tablet.

White also believes a market segment will develop for "two-iPad families." "[W]e would not be surprised if certain consumers end up owning both a regular-sized iPad and an 'iPad Mini,' swapping between the two devices for different occasions," he writes. White notes that iCloud further enables content on the two iPads to be automatically duplicated and easier to share among Apple devices.

Admittedly, the profit margins on a smaller iPad will likely be smaller than those of its Big Brother, but White contends that gap can be managed by omitting features from the Mini found in the larger iPad.