Apple is to debut a smaller iPad this year to help fend off challenges from chief rivals Microsoft and Google, Bloomberg News reported Tuesday.

Citing people with knowledge of the plans, the report said that the screen of the new iPad would be between 7 and 8 inches (17.8 to 20.3 centimetres), putting the device in direct competition with the Nexus 7 tablet computer announced by Google last week.

The iPad currently only comes with a 9.7-inch (24.6-centimetre) screen, and the cheapest version costs $200 dollars more than the Nexus 7’s $199 price.

According to the report, the new device would not feature the same high-definition Retina screen as the iPad 3. But thanks to its smaller screen, Apple would be able to sell the mini iPad at near the same price as Google’s tablet and still earn the same profit as it does on the larger iPads, the report said.

Microsoft recently announced a competitor to the iPad, a high-powered tablet running on Windows 8 and due out in the third quarter. Prices have not been announced.

Making a smaller iPad would be a major shift for the company, whose founder Steve Jobs repeatedly derided mini-tablets as incapable of offering a good user experience.