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I think Amazon has proved there is a mass market for a smaller tablet, the question is whether Apple want to move into a market segment where there is already lively competition, and it would likely have to settle for a lower margin?
(I would certainly be tempted if a 6-7 inch iPad was released)
Another question would be: Is is a big iPod Touch, or a small iPad?
Apple have chosen different aspect ratios for the two different devices, so which would they choose for an in-between one?
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