Apple viewed as unlikely to launch 7-inch iPad in 2012

Analyst Brian Blair with Wedge Partners said in a note to investors this week that though Apple is believed to have built prototypes for a 7-inch iPad, and rumors of such a device launching persist, he doesn't believe Apple will release a 7-inch tablet in 2012.

"Jobs was emphatic in his view that 7-inch tablets were dead on arrival," Blair wrote, "and we believe it would be unlikely to see the company test the waters in this category anytime soon."

Blair thinks it's more likely that after the launch of a third-generation iPad Apple will keep its current iPad 2 on the production to decrease its price and address demand at the mid-tier range.

"We believe iPad 2's price drop could drop to the $349 to $399 range with Apple offering a single 16GB model," he said.

Blair expects that the third-generation iPad will arrive in the late March or early April and will be able to boast about a retina display, 4G compatibility and Siri functionality, along with higher-resolution cameras in a 1-megapixel front-facing camera and a 3-to-5-megapixel rear-facing camera.

As for the rumors of a 7-inch iPad, Blair believes that Apple is highly unlikely to launch such table, despite the recent rumors from the Far East, claiming that Apple is "likely" to launch a smaller iPad several months after the next-generation iPad, at some point in 2012.

"We know developers aren't going to deal well with these different sizes and they have to change their software every time the screen size changes," the late Apple co-founder said. "When we make decisions on 7-inch tablets it's not about cost, it's about the value of the product when you factor in the software."