Why a smaller iPad mini has a place in Apple’s future

Reports on Tuesday claimed that Apple (s aapl) has ordered 7.85-inch test displays for a possible iPad mini to come with the next big hardware refresh. Of course, we’ve heard talk of a smaller iPad for a long time, and yet former CEO Steve Jobs was vocally opposed to the idea. Still, the context has changed since then, so here’s why I think we’ll see an iPad mini at some point down the road, and likely sooner, rather than later.

The languishing iPod touch

Apple “updated” the iPod touch when it unveiled the iPhone 4S, but it’s not what you would call a revolutionary change; in fact, it seems like the only thing Apple changed was to add a white color option for its touchscreen iOS-powered media player.

I think that’s because the role the iPod touch played is becoming less of an issue now that the iPhone is more widespread worldwide, and especially now that Apple makes an iPhone that can be had for $0 on contract in many markets (the 8 GB 3GS). The touch is an iPhone for people who otherwise couldn’t have one; with far fewer barriers to entry for an iPhone, the touch’s role in Apple’s line is less defined.

Some pundits have described a smaller iPad as a larger iPod touch, and they’d essentially be right. But simply adding some screen real estate to an iPod touch, while keeping it slim and small enough to hopefully fit in a back pocket (to borrow a standard for portability held dear by my colleague Kevin Tofel), changes the role of such a device in significant ways. It becomes a third category of product, one that might offer something to both existing iPhone and iPad owners, unlike the iPod touch.

Apple can diversify the category it created

The tablet is still in its infancy, but Apple has already shown that its interpretation of the device can threaten long-established products like the notebook PC and help Apple take a lead position in how computing will look ten years from now.

The upheaval Apple spearheaded means we’ll soon think about tablets as a different sort of category of device from others, I believe. It will be more like PCs, where people often have both desktops and notebooks to suit different purposes, but lower costs could make it viable to own multiple tablets with similar, but distinct niches.

There’s a healthy consumer appetite for Apple tablets, and I think Apple will test that appetite with variations on its original theme, the same way the iPod spawned a bevy of model types during its rise to prominence. Apple admittedly seems to be simplifying its iPod line now, but that’s because interest as waning as consumers turn their gaze to iPhones and iPads.

Kindle Fire demonstrates interest in small done right

Consumers have only been cool to lukewarm on smaller slates to date, but the Amazon Kindle Fire (s amzn) seems to be proving there’s a definite interest in that category of device, if done well. Amazon is selling lots of pre-orders to customers based mostly on its reputation, a few slick product demos, and pricing.

Amazon may have a decent head start, but Apple doesn’t have to be first to a smaller tablet to be the best. It has proven time and time again that a strategy of taking what works for its competitors, and then polishing that concept and presenting it as new and magical works well with consumers. The latest example of such a strategy is Siri, which owes at least somewhat to Android’s Voice Actions on Google(s goog) phones. Apple’s reputation, combined with a stellar experience, could help it swoop in and steal Amazon’s thunder after the e-tailing pioneer proves there’s a strong consumer demand.

Final thoughts

The iPhone 4S kept the iPhone 4’s screen, which is 3.5 inches. One reason Apple did that may have been to make it optimal for use with one hand, but another could be to keep the phone territory distinct from the tablet space. Large, unwieldy phones don’t seem like something Apple would create, but slim, portable tablets, despite Jobs’ past comments, could definitely fit the company’s design history.

As to past comments denying such a device is forthcoming, don’t take those too seriously; Apple knows what to say and when to say it in order to promote its agenda at the time, and when to release something that flies in the face of earlier statements in order to capitalize on a market opportunity. If an iPad mini makes sense as a growth opportunity for Apple, it won’t let anything stand in the way of releasing one.