Apple currently testing devices, according to Wall Street Journal.
In December, we reported Apple could be working on a 7.85-inch iPad for a 2012 launch.
Now, WSJ reports Apple has an eight-inch version in the pipeline, citing suppliers that have seen a test device with the same screen resolution as the iPad 2.
Additionally, AU Optronics and LG Display are rumoured to be supplying the panels for the mystery tablet.
The iPad 2 measures at 9.7-inches, and it's thought that the iPad 3 will be unveiled by Apple next month, but whether any such device, eight-inch or larger, will actually materialise remains unknown.
If Apple did choose to release a mini iPad, it would undoubtedly be to compete with Amazon's seven-inch Kindle Fire, which is thought to have sold six million devices already, following a November 2011 release.
It would certainly be interesting to see what a mini iPad's price tag would be, given that the Kindle Fire targets the low-end market for just $199.