Apple’s iPad makers have began delivering samples of 7.85-inch tablet panels to manufacturers for verification, according to Digitimes. Volume production is said to begin some time in the third quarter of 2012, according to industry sources. An iPad Mini would be a direct response to Amazon’s bestselling Kindle Fire, Barnes and Noble’s Nook, as well as other 7-inch Android Tablets.

One can pretend this iPad has a 7.85 inch screen, to visualize an iPad Mini:

Steve Jobs thought that the present size of an iPad is the smallest possible for a tablet, though some users consider its size to be bulky, and would like something sized between an iPad and an iPhone – about 7 inches. Earlier this month, Ezra Gottheil, an analyst with Technology Business Research, told the Chicago Tribune that Apple expects to release an iPad Mini later this year. In response to Jobs’ assertion that a 7-inch screen would be too small for an iPad to “express the software,” Gottheil speculates that Apple might include a keyboard accessory with a mini iPad. “I believe that’s always been in the plan,” Gottheil adds. “Actually, that’s a good form factor for some users, and although they will also charge a premium above other similar-sized tablets, they want to protect that price flank.”

Apple has sold a lot of iPads so far, and grabbed a nearly 60% share of the tablet market in 2011. Still, Apple is losing market share to Android tablets, falling to 57.6% in Q4 2011, according to data from Strategy Analytics. In Q4 2010, iPads had 68.2% of the worlds tablet market. Digitimes estimates that the price of a 7.85-inch iPad would likely be set at US$249-299, considering Apple has lowered the price of the 16GB iPad 2 to US$449, as an addition to the latest on iPad mini rumors.