Apple has been working on a smaller version of the iPad in its Cupertino labs, according to Daring Fireball's John Gruber. On an episode of The Talk Show podcast, Gruber said that he's heard details of a 7.85-inch prototype that runs at the same 1024 x 768 resolution as the iPad 1 and 2. Such a device wouldn't quite match the clarity of the new iPad's Retina display, but at around 163 pixels per inch would still offer a sharpness increase over the original iPad without apps needing to be rewritten or updated. Gruber says that the device is about as tall as the 9.7-inch iPads are narrow when held in portrait orientation.
The revelation isn't necessarily surprising, as we've heard rumblings of smaller iPads before, and Apple undoubtedly builds multiple prototypes of products for testing before deciding whether or not they will ever see the light of day. Still, Gruber is well-connected, and the calling out of one screen size in particular is interesting — it's the one specification in particular that the company has been historically the least willing to change, with the iPad so far only coming in a 9.7-inch variety and the iPhone sticking to its 3.5-inch display since being announced over five years ago.