Why? Because Apple co-founder 'despised' the idea, which would make it a "radical; post-Jobs move that deviates from Apple's core strategy," said Thomas. He believes that Apple doesn't need to mess with its tablet range, because it is already so successful. Plus, they have a bigger profit margin than other tablet manufacturers. Amazon even loses money on every Kindle Fire it sells, focusing on the profit it will in turn make from eBook sales instead.

Also, Thomas thinks that Apple wouldn't price a smaller iPad competitively, because "they can price a roll of toilet paper with the Apple logo on for $10 and likely sell cases of them.

thinks that the recently unveiled Google Nexus 7 will sell well and "take business away from Apple's $399 iPad 2," which is why he believes that Apple will be forced to make a 7in tablet or suffer the consequences.

"Apple wants market share and will do what it takes to get it, as long as it's profitable, they can deliver a great experience, and stay true to their brand," said Moorhead. "Apple could do just that with a 7in $299 tablet. Apple would be very profitable as well, as the most expensive piece-parts of a tablet are the display and touchscreen, which are priced somewhat linear with size."

also thinks that Apple could make a profit from a smaller iPad. "I bet Apple could make a $199 iPad mini and turn a profit on it -- especially with a $249 version sitting next to it with double the storage," he wrote. "If Apple thinks people would buy a smaller, cheaper iPad and that they can turn a profit making them, they'll do it. No reason to overthink it."