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What will a 7-inch Apple tablet mean for other OEMs?

With rumors continuing around an upcoming 7-inch tablet from Apple and Samsung introducing a new 7-inch tablet on Android?s Ice Cream Sandwich operating system, this segment of the tablet category continues to heat up.

The big news in the 7-inch tablet segment over the past few months has been Amazon?s success with the Kindle Fire. While Apple and Samsung will not be competing with Amazon on the pricing front, their moves suggest that the Kindle Fire has proven the appeal of the 7-inch tablet and the need for tablet manufacturers to be in this segment.

?We do have confirmation from a number of different sources that Apple will be releasing a 7.8 inch in the fourth quarter of this year,? said Rhoda Alexander, senior manager of tablet and monitor research at IHS/iSuppli, Santa Clara, CA.

?If Apple manages to launch a 7-inch tablet in the fourth quarter, it presents a real challenge to the competition right when they are working hard to drive holiday sales,? she said.

?I think it is going to give Apple a huge push in the consumer segment to have that product out in the fourth quarter of 2012.?

Entry-level device
A 7-inch tablet from Apple could introduce consumers to the Apple brand, which might be worth it to the brand even if there is less money to be made in this market.

While a 7-inch tablet from Apple is likely to still be premium priced it should carry a lower price point than the full-size iPad.

?If you look at this market going forward, you really have a bifurcation happening with Apple at the premium edge and a lot of activity at the value end,? Ms. Alexander said.

?But there are certain markets and certain customers who would like to have a smaller device,? she said. ?This would be an opportunity to have a entry-level product for Apple.

?Apple is facing a choice, do we do a smaller device and take the consequences of what that means from a financial perspective or risk its share of the tablet market declining over time.?

Apple has recently been playing around with pricing a little bit more recently as it looks to increase market penetration. The iPhone 4s was launched with three price points: $199, $299 and $399 while the iPhone 4 now goes for $99 and the 3GS is available for free with a contract.

On fire
While Apple continues to control the tablet market, the success of the 7-inch Kindle Fire from Amazon since its launch in the fall could be a factor in Apple?s decision to introduce a smaller tablet.

Recent research from Strategy Analytics shows Apple maintained its strong leadership in tablets in the fourth quarter of 2011 with a 57.6 percent share while Android?s share jumped to a record 39.1 percent in the fourth quarter of 2011.

The Kindle Fire, which launched in the fall, had a 35.7 share of Android tablet user sessions in January, according to data from Flurry Analytics.

Part of the appeal of the Kindle Fire is its focus on easily discovering and consuming digital content, including apps and video on demand.

?The Kindle Fire is a factor in this moving forward,? Ms. Alexander said.

Samsung is also jockeying to position itself in the 7-inch tablet space with a wide array of choices for consumers.

This week, Samsung introduced a new 7-inch tablet, the Galaxy Tab 2, which will be the first tablet to run on Google?s new Android Ice Cream Sandwich operating system.

The new device is not that much different from the Samsung Galaxy Tab 7.0 except that it is thinner and lighter.

Samsung appears to be creating a family of products in the 7-inch tablet space with offerings that have 16GB, 32GB, are Wi-Fi only or are on 4G. The company has also been showing off a 7-inch Active-matrix OLED device, which is not backlit and offers superior color saturation.

?The 7-inch tablet is a product that makes a lot of sense for Samsung,? Ms. Alexander said. ?They are developing a family of products in this category.?

Final Take
Chantal Tode is associate editor on Mobile Marketer, New York