I'll believe it when I see it. We already have an ipad mini IE ipod touch and iphone and yes I've read on my iphone daily for the last year since the kindle for iphone app came out. It's very convenient to read on since it fits in the palm of your hand. I do love reading on my ipad now that we have them.
I think there will be a market for a smaller iPad. As an owner of the square nano, I longed for the screen size of the Touch, but realized that it still wasn't enough. The big issue with the iPad is that is big enough for most of us to work with, but it is also going to difficult to carry around. A smaller iPad will suit some who need a bigger screen, but also need to put it in a large pocket. A larger iPad may be more difficult to sell. Unless it can be used as a wall mount device, I would wonder about its potential.
Interesting conversation. I was just saying to my husband this morning that it would be nice if they had a smaller iPad - somewhere in between the Touch and the iPad. I find the iPad heavy and hard to hold a lot of the time when playing games and lately when using a sketching app, and definitely when reading. I have no problem reading on my Touch, but I also have a Kindle which is the perfect size and weight for long periods of reading.
I love the iPad and have been having a lot of fun trying new apps, but it's killing my left hand from holding it for long periods of time. I sat here just a little while ago thinking of how I could make something, either knit or crocheted, to help me hold it!!! If I can put the iPad down long enough this week, I'm going to design something!! :)
The only reason for the Mini would be to take over the eReader market. The current price points for the iPad are too high compared to other eReader only devices out there. Some people like the iPad but can't justify the extra expense when they will only use it for reading. A smaller iPad in the $300.00 to $400.00 range will have Amazon shaking in their boots.
You're not going to see any kind of iPad between the 9.7" screen and the phone/touch. Apple has decided on the iPad at its' current size - and that'll be it. They won't try to go to a smaller unit - it would defeat the strategy and water down the success of a single sized unit.