I expect Apple will deliver an ~8” iPad minus 3G/4G, cameras, and Bluetooth, and price it at $249, with further price discounts available for schools; that’s just speculation on my part, e.g., not based on reading of tea leaves from the Apple supply chain etc.
But the most important motivation would be to give the company a way to stomp the competition. "Rather than just maintaining their dominance of the tablet market share, a smaller iPad would let them make a move to crush the opposition," said Alexander.
Her reasoning was based on tablet numbers from the fourth quarter of 2011.
During those three months, Apple's share of all tablet unit sales dropped to 57% from the prior quarter's 64% as lower-priced rivals, particularly the Kindle Fire and Barnes and Noble's Nook tablets, sold in volume.