It seems inevitable that Apple will announce a smaller iPad next month. From leaked photos, parts and careful math the product will sit between the full sized iPad and iPhone/iPod Touch. The consumer demand for such a product has been established by Samsung, Amazon and Google producing the only glimmer of hope Android can someday take on the market dominating iPad. So it just makes sense that Apple would produce a similar product.
The only problem with this line of reasoning is Apple could care less about consumer demand. They do what they do and then convince us to buy the result. The current iPad is a tremendous success at it’s $400-500 entry price points. The current size of the device is perfect for what it does, the only area for improvement is in weight which will likely be solved in the next refresh. And finally, Apple just doesn’t expand their lines with the same thing in smaller sizes. At least in mobile devices (just look at the iPod lineup for an example). So for these and developer fragmentation in apps I have long contended Apple would never do “a 7 inch iPad.”
If all the speculation is correct, the size of the iPad mini (or Air) will be closer to 8 inches so my previous statements will be technically correct. But what really bothers me is the sameness to the current iPad; there just has to be something magical about doing the smaller version aside from a lower price point. This got me thinking about the next big thing in computer user interface; what comes after the mouse. And I think the new, smaller iPad could be part of that future.
Since Apple introduced multi-touch gestures in Mac OS X and the magic trackpad most of us have at least become aware of where computing is headed. But the gestures just are the tip of the iceberg that will start to come to light when the iPad mini is released.
Imagine using the tablet as your main pointing device replacing your mouse. Each application could have their own palettes and special controls on the iPad screen as well as accept your touch input for pointing and manipulating data. Games would be another interesting application what could span the desktop and Apple TV. This mouse app could be run on a full sized iPad, of course, but I think being in the middle of the too small iPhone and the too large iPad is the perfect spot. And the entry price of $299 would not put it out of reach for most consumers. So I think the iPad mini will also double as your mouse for your laptop or desktop. We’ll see what they have for us in October.
Apple did something interesting today with the announcement of their new iPad that shows they have no problems cannibalizing their own laptop business. Instead of taking on lower priced tablets, 
I have long espoused that there is no tablet market, just an iPad market. But with the introduction of the Kindle Fire and to a lesser degree Nook Tablet there is a competitive threat to be dealt with. Both Amazon and Barnes & Noble were smart to not take on Apple straight up as Samsung and others have done, and failed, with Android tablets. No, they developed highly customized user experiences centered around reading and content consumption and carved out a foot hold with price. And like what Android did with smartphones over time, you can extrapolate the same course might be taken in the tablet space with incremental improvements and “good enough” solutions at prices half or less Apple charges for the iPad.