Industry sources are reporting that the growing competition in the Tablet PC market is forcing Apple to start work on a smaller version of the iPad.

This new edition could feature a 7.85” display and is expected to arrive in the market before the start of the holiday season next year.

Apple iPad 3 should launch in the first quarter of next year with a massively improved display.

Apple continues to dominate the Tablet PC market and they are likely to continue doing so throughout the next year.

Android might start snatching market share away starting 2013. Apple just has to handle the growing competition from populist products like the Amazon Kindle Fire.