Apple is preparing to release a smaller version of the iPad in time for the 2012 holiday season, according to a report just weeks after competitors Google and Microsoft announced their own tablet offerings.

The newest iPad would feature a screen measuring between seven and eight inches — down from the standard 9.7-inch screen of the previous three versions, Bloomberg reports. It would not, however, feature the retina display introduced with the most recent iPad in March.

Bloomberg cites “two people with knowledge of the plans” in its Tuesday report, and says the new device could be officially announced as early as October.

Some type of “iPad Mini” has been speculated about for a while, but this most recent rumbling comes after a month in which Microsoft and Google both touted upcoming devices aimed to grab significant shares of the growing tablet market.

At a secretive and highly hyped event in mid-June, Microsoft flaunted its Surface tablet, which comes with a slick keyboard case but so far no price or launch details. Last week at its annual developers conferences, Google introduced the Nexus 7 tablet, which will run on Jelly Bean, the latest version of the Android operating system.

But, one analyst told Bloomberg, a smaller iPad launched in time for the holidays would be a punch to the gut for Google and Microsoft — as well as potentially Amazon, whose Kindle Fire has remained a popular (and cheaper) iPad alternative.

“It would be the competitors’ worst nightmare,” said Shaw Wu, an analyst at Sterne Agee & Leach Inc. “The ball is in Apple’s court.”

via Bloomberg