Although Steve Jobs once put very cold water on the possibilities for a smaller iPad — it was all about you needing sandpaper to make your fingers small enough to navigate the tinier screen — rumors about an iPad mini just won’t stop. It has reached the point where such a beast must be inevitable, where the media is even designing products for Apple.

But why should anyone see a need for a smaller iPad? Isn’t Apple selling so many copies of the 9.7-inch version that they continue to trounce the competition? Yes, but Apple may need to find a compromise.

Most of the rumors about a smaller iPad speak of a 7.85-inch model. This curious size, with the height matching the width of the current iPad, will allegedly include a screen with a resolution of 1024×768 pixels, the same as the iPad 2. Used on a smaller device, it won’t be quite a Retina display, but it will be sufficiently sharp to deliver a good user experience, assuming that Apple’s customers can adapt to a smaller iPad of course. It also means that developers won’t have to modify their apps for the so-called iPad mini.

But it comes down to the reason for such a device, and it may be all about convenience, utility, and, of course the competition.

As you no doubt recall, the 7-inch Amazon Kindle Fire supposedly did pretty well during last year’s holiday season. Although Amazon doesn’t officially break out unit sales for Kindles, the numbers were said to total several million, although it is also reported that it appears to have been strictly a holiday phenomenon. Sales apparently dropped off substantially after the first of the year.

Then there’s the decision of Google to push out a 7-inch tablet as an Android OS flagship. That’s the Nexus 7 that is shipping this month for $199.

Now the Nexus 7 has been getting pretty decent reviews. The hardware is apparently far more powerful than the Kindle Fire, and there’s even a front-facing camera for videoconferencing. That’s something the current Fire lacks. But the real question is whether Google’s marketing plan has legs. At $199, the Nexus 7 is being sold at or close to cost. Google can only make a profit from the sale of apps and streaming content from Google Play. This is a variation on Amazon’s marketing scheme, but Amazon also has a well-deserved reputation as a powerful online retailer with a huge selection of merchandise that ranges from e-books to personal computers (including Macs), clothing, cosmetics, and even home appliances.

So a single purchase made on a Kindle Fire might bring thousands of dollars of revenue to Amazon, whereas most purchases at Google Play will likely amount to less than $50, even for those who order several apps, and stream a few flicks for weekend enjoyment. The revenue potential just isn’t there, although this is one area where the media is, once again, just not paying attention.

In short, I don’t see Google’s business plan making much sense, while the Kindle continues to have huge potential. So why should Apple produce an iPad mini?

Well, if there is real customer demand for smaller tablets, and if customers really like them (very important!), it might make sense for Apple to offer an alternative size. Sure, there will be some cannibalization from the regular iPad. But it may well be that, being exposed to both the smaller and standard iPads, customers who can afford to pay extra will opt for the bigger model.

But an iPad mini would be easier to carry, and might be more convenient for students, particularly in the lower grades. It would also be a useful option for cash-starved school systems that simply do not have the money to spend on truckloads of full-sized iPads.

Certainly an iPad mini, probably listing for $249 or $299, would easily vanquish the competition. But that again assumes large numbers of customers would like the smaller model, and aren’t just buying them because they cannot afford the regular iPad. It is not even certain that there will be sustained demand for a Kindle Fire and a Nexus 7 during the 2012 holiday season.

The iPad mini scenario demands a reality check. Apple is not going to build a product just because the media tells them to, or because other companies have seen some level of success with such a form factor. Apple’s magic is in deciding which products not to produce, and what features to avoid or remove. Even if an iPad mini has real potential, it may be more as a consumption device rather than a productive tool. The display on the regular iPad is not dissimilar to older Apple PowerBooks, which were credible productivity machines. An iPad mini wouldn’t work so well as a productivity tool, except, perhaps, for small children writing letters and doing homework.

In the end, it may be that these rumors stem from the fact that Apple is just building prototypes to test the waters and evaluate the feasibility of an iPad mini. So orders are observed somewhere in the supply chain. Such a product may never see the light of day, ever. But the rumors won’t stop, at least until fall comes and we know for sure one way or the other. But even if no iPad mini appears, there’s always 2013.

This article was posted on Friday, July 6th, 2012 at 12:00 AM and is filed under News and tagged with: Amazon, Amazon Kindle, Amazon.com, Android, consumption device, Google, Google Play, iPad mini, iPads, Kindle, Kindle Fire, Macintosh, Nexus 7, Powerbook, Steve Jobs.