Rhoda Alexander, who manages tablet research for HIS iSuppli has said that sources indicate that Apple might release a new iPad version with a screen size of 8 inches at a lower price to take on the competition in a better way.

The rumors about the 8-inch iPad emerged following a report by the Wall Street Journal that cited sources to say that the technology giant is considering releasing a smaller tablet in the market.

“Based on our sources, we're very solid that Apple will release a smaller iPad that uses a 7.85-in. display, essentially an 8-in. screen, this year,” said Alexander. IHS iSuppli believes that the new smaller iPad, which is dubbed iPad Mini by Alexander, will be priced at about $299 to take on rivals that are offering cheaper tablets.

The research firm arrived on the price after estimating savings from a smaller a smaller display and associated touchscreen as possibly lesser storage. The firm also said that that $349 would be another option for the company.

She said that a smaller iPad would address several concerns of the company as there is a segment of the customers who believe that the 10 inch iPAd tablets are too big for them and are thus opting for rival offering of smaller size increasingly.

Apple sold 15.4 million iPads and had a market share of 57 percent of the market in the previous quarter. The overall market grew 55 percent to 27.1 million in the quarter, according to the research firm.