Nexus 7's nightmare: Apple may release a smaller and cheaper iPad Mini without a retina display in October.

Two informed sources told Bloomberg that Apple would release a smaller and cheaper iPad within this year. Under the double impact of Microsoft and Google's own tablets, Apple hopes to maintain its dominant position in the tablet computer market with this new product.

Apple may announce this new product in October. At that time, we will see a 7-8 inch screen which is smaller than the current 9.7 inches. In consideration of maintaining a low price, it will not be equipped with the retina display used on the iPad3.

The Nexus 7 released by Google not long ago and Amazon's Kindle Fire both have 7-inch screens and are priced at $199 each. The price of Apple's smaller and cheaper iPad may be close to them. Some analysts said that the new iPad Mini might weaken the ambitions of Google, Microsoft, and Amazon in the tablet computer market, and it would become a nightmare for competitors.

DisplaySearch estimates that the tablet computer market will reach $66.4 billion this year. Since the launch of the iPad in April 2010, Apple has been dominating the tablet computer market. Gartner data shows that Apple owns 61% of the tablet market share.

At the end of last year, there were rumors from Apple's supply chain that in order to compete against the 7-inch Kindle Fire and large-screen Android phones, Apple might launch a 7.85-inch iPad before the fourth quarter of this year. Looking at the timing, it aligns well with the release date revealed by Bloomberg.

Now, the threats to Apple's tablet market are not just from Kindle Fire and large-screen Android phones, but also from Microsoft and Google, who have joined this battle and launched their own tablets. Therefore, Apple seems to have more reason to release such an iPad.