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Come on, its eventually going to happen. It's all about timing. Not everyone wants to read a 9.7" tablet in bed at night. It'd be great to have a smaller option. The same with a larger screen iPhone. I wouldn't be surprised if the new one was 4" or bigger.

Honestly, it'll be great if we saw a 4.3" iPhone, 7.85" iPad and a 10.1" iPad by next year. But only Apple knows. I'm enjoying this retina for sure.
 
Am really enjoying my iPad 3 and would not see any need for a "junior" iPad but a lot of people would like to see such a thing.

No doubt we will be seeing a larger screen on the iPhone 5:p
 
Current iPad apps are designed for the 10" screen and have the widget size and spacing and the font sizes chosen accordingly. iPhone apps are designed for a 3.5 inch screen.

If they bring out a smaller iPad then either developers are going to have to start catering for a new third size or apps are going to be shown at a size they weren't designed for. I'm not sure I can picture Apple going for either of those options.
 
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