Apple may be readying mid-size 'iPad'

...that developers will have to rewrite their iPhone applications to adapt to the larger-size screen on this new device, said Craig Hockenberry of Iconfactory, creators of Twitterific.

Hockenberry, who is very confident that Apple has such a device in the works, doesn't think this will be a huge obstacle, but developers will have to gauge whether the extra development effort is worth their time. One thing Apple could do is set aside a separate section of the App Store for iPad-optimised applications, while finding a way to run older iPhone applications in some sort of compatibility mode.

"It wouldn't be hard for Apple to have a 'Classic' environment on a tablet that provided a 320x480-pixel window for running one or more iPhone applications," Hockenberry said in an email. "It would be a smart thing for them to do: there are instantly tens of thousands of apps and users are presented with a familiar interface (something that looks a lot like Dashboard in Mac OS X)."

The iPad could also be the first Apple product to surface with a chip designed by PA Semi. A custom chip could solve two problems for Apple — the need to keep software compatibility with the ARM-based chips used to run the iPhone while delivering more performance for HD video playback or more robust games that competitors might not be able to immediately match.

There are two schools of thought on the pricing of such a device. UMPCs, at around $700 (£475), were considered too expensive but because they didn't offer any value, not because of the sticker price itself. It would not be hard for Apple to argue that an iPad with an HD screen, thousands of applications and a superior mobile browser is worth just slightly more than what people were willing to pay for the original iPhone.

A $699 iPad would slot nicely between the iPod touch and MacBook in Apple's product lineup and preserve Apple's profit margins. It might also allow the company to reduce the price over time if needed, similar to the original iPhone.

But Apple could also hook up with a wireless carrier to subsidise the iPad. The company has reportedly been in talks about distributing MacBooks through wireless carrier friends like AT&T in the US, which already sells 3G-equipped netbooks with a data plan subscription.

This is the last frontier of the promised convergence between computers and communication devices. That shift has already happened to the smartphone, but it seems very reasonable that, for many people, smartphone screens are too small for serious computing.

If Apple is indeed working on such a product, it will have to get the implementation right to avoid duplicating the failures of so many other mobile computing aspirants. But by having awakened the public to the promise of basic mobile computing, Apple could be best positioned to capitalise on the need for something more.