Rumors of Apple building a smaller iPad with a 7.85-inch display have been around for several months. Pundits believe that the Cupertino company would do well to release a smaller version of its popular slate to appeal to the budget tablet crowd.

Well known Apple-insider John Gruber fanned the flames last week when he said that he was aware of such a product being tested in Apple’s labs. And today, the folks over at Ciccaresedesign poured even more gas on the fire with this iPad mini mockup…

The 7.85-inch display is rumored to have a resolution of 1024 x 768. This is the same screen found in the first and second generation iPads, so it makes sense from a manufacturing perspective. Apple could use the same panels, but just cut them a bit smaller.

Ciccaresedesign’s concept gives us a good idea of what this smaller iPad could look like. And we must say, it doesn’t look bad. This definitely looks like a product Apple could release, and, if priced right, use to grab a large share of the budget tablet market.

What do you think?

[Cult of Mac]