If it's true that Apple is launching a 7-8 inch iPad Nano device later this year, it would create tremendous obstacles for Amazon and Barnes & Noble, the current leaders in this subcategory, according to, “Will Apple Hit Amazon Where it Hurts With An iPad Nano?” from the Strategy Analytics (http://www.strategyanalytics.com) research group.

"If industry speculation is true, Apple will release a smaller version of the iPad later this year, directly challenging the Kindle and the Nook, creating an entirely new market segment for Apple," says Matthew McKee, analyst at Strategy Analytics. "Assuming a price of as little as $299, the smaller device would offer cost and portability advantages, which could propel Apple to the top of the 7-inch tablet space, in addition to its number one position for 10-inch tablets.”

“Device value is determined by what consumers can read, play, or watch on their tablet, and about the user experience, something that has been sadly lacking in the $200 Tablets,” adds Peter King, director of Tablets & Touchscreen Strategies at Strategy Analytics. “Amazon’s Fire launched with strong sales due largely to its content library and the large number of available apps. Apple can rely heavily on iTunes and its apps ecosystem.”