Prototypes of a new, smaller iPad have been delivered to Apple for verification and could enter production in the third quarter, a report has claimed.

Digitimes reports that Apple's manufacturing partners have delivered samples of a 7.85in iPad, according to anonymous industry sources.

Last month, reports that a smaller iPad was being tested emerged and Digitimes also reported late last year that an iPad with a 7.85in display would hit the market at some stage in 2012.

In the most recent report, Digitimes claims that sources think that new, smaller device would go on sale for between $249 and $299 (£156 and £188) in order to compete with Amazon's $199 (£125) Kindle Fire. Production would begin in Q3 which would make sense if Apple anticipated another pre-Christmas battle with Amazon.

However, a separate report from the same outlet published this week suggests that Apple has another low-cost option coming - an 8GB iPad 2, which it will announce next week.

The 8GB iPad 2 model is expected to cost between $349 and $399 (£219 and £250), Digitimes believes.