By Lorraine Luk
Apple Inc.'s (AAPL) component suppliers in Asia are preparing
for mass production in September of a new tablet computer with a
smaller screen, people familiar with the situation said, suggesting
that the Cupertino, Calif., company is close to launching a smaller
tablet.
Two of the people said that the new tablet will likely come with
a screen smaller than 8 inches, compared with the 9.7-inch screen
of Apple's latest version of the iPad, which was released in March.
The iPad's screen size has remained the same since the first model
was released in 2010.
The Wall Street Journal first reported in February that Apple
was testing a smaller tablet, though people familiar with the
situation said at the time that the company hadn't decided whether
to proceed with the device.
Officials at Apple's component suppliers, who declined to be
named, said this week that Apple has told them to prepare for mass
production of the smaller tablet. One person said that Apple is
working with screen makers including LG Display Co. (034220.SE) of
South Korea and Taiwan-based AU Optronics Co. (2409.TW).
An Apple spokesman in California didn't respond to an email
inquiry. A China-based Apple spokeswoman couldn't be reached by
phone and didn't respond to an email inquiry.
Apple's plans for a smaller tablet come as the iPad faces new
challenges in an increasingly crowded market. Apple's competitors
include Samsung Electronics Co. (005930.SE) and Amazon.com Inc.
(AMZN), while Microsoft Corp. (MSFT) and Google Inc. (GOOG)
recently unveiled tablet devices.
Analysts said a smaller tablet could help Apple maintain its
dominant share of the tablet market at a time when competition is
intensifying. Last year, the iPad held a 62% share of the worldwide
tablet market, according to market research firm IHS iSuppli.
As the market for tablets continues to expand, consumers have
more options in terms of size, technological specifications and
price. IHS iSuppli expects worldwide tablet sales to surge 85% this
year to 126.6 million units.
Last week, Google started taking orders for a tablet device with
a 7-inch screen. Google is selling the Nexus 7 tablet for $199, the
same as Amazon's Kindle Fire, which came out last year and also has
a 7-inch screen.
Microsoft's new Surface tablet, which is expected to debut this
fall, has a 10.6-inch display, larger than the iPad. Microsoft's
Windows Chief Steve Sinofsky said that the Surface will be "priced
like comparable tablets."
--Juro Osawa contributed to this article.
Write to Lorraine Luk at lorraine.luk@dowjones.com