Asia Bizz: Electronics manufacturer Apple has just received the prototype of the new iPad which has a smaller screen. The volume production of the devices is expected to begin by the third quarter of this year.

Sources from the production unit have stated that the unofficial specifications include a 7.85-inch display, while the iPad 2 comes with a 9.7-inch screen. The manufacturing partners of Apple are at present assembling the tablet.

The tablet is expected to be priced at $249 and $299 and will be locking horns with Kindle Fire of Amazon which sells for $199. The new iPad is also expected to compete with Barnes and Nobles Nook Tablet.

The reports of the smaller iPad started doing the rounds a few months back, when reports suggested that Apple had purchased 7.85 inch panels from LG display and AU Optronics. Then it was last month when reports surfaced that Apple was testing the new smaller screen line of tablets. The development of announcing a smaller iPad comes after Cupertino is preparing to announce the iPad 3 in an event on March 7, 2012. Meanwhile Apple is also preparing an 8GB iPad 2 which is expected to be announced next week.