The New York Times has reported that Apple is very much likely to launch a smaller edition of their iPad later this year.

This new edition would retail at a price tag significantly lower than USD 500 which they charge for the current generation edition.

Apple faces significant challenge from the cheap Android Tablets. Both Amazon and Google are selling 7” tablets at very affordable prices.

We imagine Apple would price the 7.85” version of the iPad at around USD 250 to respond to the Amazon Kindle Fire and Google Nexus 7.