More reports are surfacing about a smaller iPad that Apple could launch by the end of the year.

The device will have a 7-inch diagonal touchscreen, potentially making the device small enough to fit into a purse or large coat pocket and closer in size to Amazon's standard Kindle, which has a 6-inch screen.

First generation iPads have a 9.7-inch diagonal screen.

Taiwan's Digitimes last week reported that the 7-inch iPad will be released in the first quarter of 2011, along with an improved version of the 9.7-inch model with a new processor.

A smaller iPad would be more portable and presumably cheaper and lighter, improving its odds of being chosen by people shopping for an electronic reading device.

Already the success of the iPad and the Kindle are snuffing out competition from other electronic reading books, Ars Technica noted in a story listing recently scuttled slates. They include the Hearst-backed Skiff and Plastic Logic's Que.

A new iPad screen size will add another complication for the application developers who were key to the iPhone's success, although it's nothing compared with the array of Android devices emerging this year.

In the meantime Apple's lined up a key iPad distributor. The company reached a new deal with China Unicom, the government-controlled phone conglomerate that's China's exclusive iPhone carrier, to sell the iPad as well.

I wonder if we'll start hearing gripes about Unicom's coverage and capacity, unless that's a capital offense.