I hope not...that will totally kill the excitement and exclusiveness for the iPad.
Smaller than an iPad, but larger than an iPod.. Will it be be called an iPad mini, or will it be a iPod maxi?
i was looking for a 7inch tablet for a long time. I was going to settle on a droid but if apple produces one with 3G and GPS then I will buy one without thinking twice. my problem with the current size is that it is too big to carry in a pocket and my iPad pretty much stays home. I do drive a lot and having a gps/tablet is a win win for me.
As I see it, most of the folks that are posting ... "sure why not, it would sell" ... are not looking at the cost of manufacuring and distribution, problems with resizing apps for a new display size, and that Apple doesn't sell low cost anything... they don't need to. Marketing different size screens is just the competition scrambling to do something to compete with Apple's outstanding success with iPad. Steve already mentioned that 7" is too small to work with nicely. Apple is already offering iPod Touch for more portability. Look at the iPhone scramble, hyping bigger is better ... maybe, maybe not. But what else can they do but scramble. Look at the adoption of iPad into enterprise ... well over 90%.
IMHO it will never happen ... doesn't have to.
I'm waiting on the Samsung Galaxy Note, a 5" phone-tablet hybrid. I might switch from iPhone 4S and iPad then, for on the go most days.