There have long been rumours of a 7″ iPad in the pipeline from Apple, with the latest speculation on the subject coming from Pacific Crest analyst Andy Hargeaves.

According to a report from Hargeaves Apple is expected to launch a 7.85-inch iPad Mini in October. The report gives expected specifications for the device and also fills in some sales and pricing estimates.

“Based on our supply checks, we expect Apple to launch a 7.85” iPad in October. We anticipate an entry-level 7.85” iPad with 8GB of NAND capacity to price at $299 with an initial gross margin of 31%. We estimate Apple will sell 10.0 million 7.85” iPads in FQ1 (Dec.) and 35.2 million in all of F2013. Based on estimated component order volume, we believe our iPad mini unit estimates are well within Apple’s production capacity. We anticipate 25% cannibalization of the larger 9.7” iPad (for every four 7.85” iPads added, we reduced our 9.7” iPad estimate by one), so our total F2013 iPad estimate increases to 91.6 million from 65.2 million.”

Hargeaves’ report also claims that a “refreshed” New iPad is expected to launch at the same time as an iPad Mini, with the refreshed iPad expected to have “…a slight update to the screen technology to oxide TFT, which should allow for fewer LEDs in the backlight module, and a lighter battery.”

Source: Pacific Crest (PDF) via GamesIndustry.biz