I find it hard to believe that anyone who has paid attention to what Steve and Tim have been saying over the last couple of years, can honestly think that Apple would launch a smaller iPad. For example, Steve's comment about how you would need to sand down your fingers to use a 7" tablet. I think that makes it pretty clear how Apple feels about an iPad "mini". Also, if you listened to the last earnings call, Tim made it clear that Apple doesn't see any significant competition to the iPad.
Steve was notorious for saying one thing and doing another a few short months later. It is part of their strategy. It is called misdirection and is aimed at the competition.
Also, while you're advocating listening to what people at Apple have been saying on the matter, I suggest you do a quick search for "Eddy Cue e-mails samsung trial 7 inch iPad". Then you can come back and talk to me about paying attention.
kthx