Apple is thought to be working on a smaller version of the iPad to be released in the first quarter of 2011.

According to DigiTimes, a daily newspaper for semiconductor, electronics, computer and communications industries in Taiwan and Greater China, Apple is planning a five to seven inch version of the iPad.

DigiTimes Research senior analyst Mingchi Kuo, citing talks with upstream component sources, claims Apple are planning a device under $400 (£262).

Currently the cheapest iPad, the 16GB Wi-Fi model, costs $499 (£327).

The smaller more portable iPad would be aimed at those wanting to read rather than write and input text.

Apple sold 300,000 iPads last Saturday, 3 April when the device went on sale in the US.

Brits are expected to be able to get their hands on the device later this month.

The news comes just a week after PC Advisor's sister title Macworld UK ran a story on Apil Fools Day, claiming Apple was working on the iPad Nano.

See also: Apple iPad owners complain about weak Wi-Fi