Japanese blog Macatakara (via Cult of Mac) says that it's source has already seen a prototype for the so-called "iPad Mini", and revealed that the device's frame is just 7.22mm thick.
This would make the tablet among the thinnest on the market, much slimmer than main rivals, Amazon's Kindle Fire (11.43mm) and Google's Nexus 7 (10.45mm), along with the Toshiba AT200 (7.7mm).
Macatakara said that Apple's tablet will be the same height as the Nexus 7, Google's cheap but high specced tablet that will launch this month, but a bit wider across the middle.
Previous reports have suggested that the iPad Mini will come with a 7.85-inch screen, compared to the 7-inches in the Nexus 7 and Kindle Fire.
According to Macatakara, the small-screen iPad will come with WiFi and 3G connectivity, enabling users to choose how they get online.
This would put it at an advantage over the Nexus 7, which only supports access via WiFi.
It is also thought that Apple would charge between $250-$350 (around £160-£230) for the iPad Mini, putting it close to the pricing for the Nexus 7 - $199 (£159) for the 8GB model or $249 (£199) for 16GB.
Macatakara's sources say that the small screen iPad will go into production in September at Foxconn's Brazil-based plant, rather than the Chinese bases where previous iPad models have been made.
Apple has not commented on the speculation, and a blog's use of an 'unnamed source' should possibly be taken with some scepticism.
But there has been a pretty consistent run of reports over the past six months saying that Apple is readying a small screen iPad to help maintain its dominant position in the tablet market.
This is, of course, despite the late Apple co-founder Steve Jobs previously claiming that no tablet should have a screen smaller than the current iPad's 9.7-inches.