Former Apple boss Steve Jobs wasn't in favor of launching a smaller version of the iPad, but according to the rumor mill such a device is definitely on the way. Pew Research Center shows that one of the prime reasons why a smaller, cheaper iPad is coming is because Apple is losing a lot of marketshare in the tablet market. Sales of the iPad tablet are still booming, but the company is no longer dominating the market as it used to do last year.
Tablet sales have been steadily increasing, but those sales have most definitely not all gone to Apple. Nowhere near it in fact, as it looks like people just don't want to pay Apple's premium pricing and not everyone wants an Apple-made tablet. In 2011, Apple's iPad had a massive 81% market share, with Android at 15% and others at 4%. However, merely a year later, Apple's market share has had a massive drop to just 52%, with Android now taking up a very significant 48%. Interestingly, it looks like Amazon's new Kindle Fire has shot up to 21% market share, so the competitive threats are clear to see, hence Apple's strategic move to make a cheaper iPad makes perfect sense. If Apple don't do something quickly, then it's quite likely that the iPad's market share could easily drop to well below 50%, which would make Apple terribly unhappy.