Coming soon: Apple's iPad nano production has begun

The Apple [AAPL] fightback is in full swing this season as the company makes a series of big moves to see off its imitative competitors. The iPhone 5 hits retailers this Friday, but even as it does Tim Cook’s firm’s swinging the follow-up punch -- the 7-inch iPad mini/nano, production of which has already begun.

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[ABOVE: Of course that's the recently-announced iPod touch, but reports claim the much speculated-upon and possible mythical iPad nano will look a little like this.]

Production begins

A report from China’s Economic Daily News claims the iPad mini has hit production at Apple supplier, Pegatron and is set to launch in October, presumably around the time many first predicted the iPhone would be released. As ever with Apple product releases, the first disputable spy shots of the new device appeared online this morning.

Pegatron will build over half the iPad minis Apple’s expecting to ship this year, while iPhone partner, Foxconn, will assemble the rest. Apple is expected to offer its 7-inch device at around $299. Confirming previous speculation it will offer a 7.85-inch/4:3 display and is expected to be a little like a larger elongated iPod touch.

So how many devices is Apple hoping to sell? Up to five million units per month, the reports claim. That’s because you won’t be able to get a better tablet at the price.

This is an aggressive play. Why? Simple, Google, Android and the smartphone.

Apple knows it will have to fight hard to maintain a strong position within the smartphone market. There’s ample evidence of this, for example the latest study shows Android’s mobile ad share gaining on Apple, though this is likely to change with iPhone 5.

Not without a fight

The Android army and the future smartphone invasion of Microsoft mean company executives recognize they won’t achieve the level of ascendancy they’d hoped for, though don’t be surprised if they diversify the range in future. In truth it’s evident rivals have dented Apple’s smartphone ascendancy.

That’s not to say the iPhone is out of the running -- far from it: the latest Velti figures also suggest that the iPhone 5 will be adopted faster than was the iPhone 4 and will be among the top five smartphones. 

The company expects to ship at least 53 million iPhones by the end of the year, and has recruited Pegatron to assemble the things.

The popularity of 7-inch devices (such as the Android-powered Kindle range) has driven Apple to assemble a plan to cannibalize its own iPad market. The argument’s solid: if customers want to buy a smaller, cheaper tablet that’s like an iPad, why not sell them a smaller, cheaper iPad? 

That’s what we’re expecting to see introduced in October. 

Perhaps that’s also why the latest more visually-inspired version of iTunes is also set to appear that month: Apple must by now be growing tired of seeing its beta software decompiled in order to reveal built-in code designed to support unreleased devices.

So as you watch Apple’s record iPhone sales results roll in this month, be prepared for Apple to do it again next month when it moves to expand the iPad range in order to make sure that in 2013 the tablet industry will remain the iPad industry. The name of the product remains open to question of course: will it be the iPad mini, iPad nano, or iBook? We’ll know more by the end of next month.

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