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Budget iPad 2 to launch next week, iPad Mini coming later in 2012?

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New reports have emerged suggesting that Apple will launch a budget version of the iPad 2 next week, and put a small screen tablet into production later this year, as it seeks to see off the challenge of cheap Android tablets.

Apple has confirmed that it will hold a press event next Wednesday, at which at least one new iPad will be announced, with widespread speculation that it will be the iPad 3.

However, fresh reports suggest that the event will also herald a more affordable 8GB model of the iPad 2 that was released last year.

According to Digitimes, the new product would be priced at $349 to $399 (£219 to £250), and Apple will also lower the price of the 16GB iPad 2 to $449 (£281). This is presumably for the WiFi version, not 3G.

The industry blog also claimed that a source said the iPad Mini - a new smaller screen tablet - will go into production in the third quarter of 2012.

Digitimes believes that the iPad Mini will be a direct rival to the various budget Google Android tablets, particularly the Amazon Kindle Fire.

Various reports have suggested that the new tablet will have a 7.85-inch screen and will be priced at between $249 and $299 (£156 and £187).

Digitimes said: "The planned launch of the 7.85-inch iPad is apparently to take on Amazon's $199 7-inch Kindle Fire as well as a comparable model from Barnes & Noble, although Apple already took up nearly a 60% share of the tablet PC market in 2011, indicated the sources."

Diversifying the iPad range would mirror the approach taken with the iPod, as Apple has released a number of different shapes and sizes of the MP3 player to keep the line fresh.

In other speculation, it has been suggested that Apple will announce a new generation of Apple TV at the press conference next week in San Francisco, bringing various new features to the set top box product.

> Behind the Buzz: What to expect from Apple iPad launch event

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