The Wall Street Journal today backed up previous reports saying that the California firm is no longer just testing the new iPad model, but now intends to put it into production.
Citing people "familiar with the situation", the Journal said that the iPad Mini will have a screen size of less than 8 inches, compared to the 9.7-inch display fitted in the iPad since 2010.
Separate reports have suggested that the small screen iPad will come with a 7.85-inch screen and retail for $299 (£191).
According to the Journal, sources in Apple's suppliers in Asia have been told by the US firm to "prepare for mass production of the smaller tablet".
The suppliers were not named, but it is thought that Apple is working with LG Display of South Korea and Taiwan-based AU Optronics on the iPad Mini.
Apple has not commented on the report.
Apple remains the clear leader in the tablet market, with its iPad holding a 62% share last year, but the firm is facing increasing competition from other players.
Amazon has done well in the US with its Kindle Fire, but it is the arrival of Microsoft's Windows 8 Surface tablets and Google's $199 Android-powered Nexus 7 which could prove the biggest challenge.
The Kindle Fire and Nexus 7 are both 7-inch screen tablets which come with good specs and a cheap price, while the Surface has a 10.6-inch screen and will compete with the high-end iPad.
Diversifying its own tablet product range could help Apple ensure that it fends off all challengers in the tablet market, which is estimated to rise 85% this year to 126.6 million units, according to IHS iSuppli.
Pacific Crest Andy Hargreaves has previously predicted that Apple will debut the 7.85-inch iPad Mini in the fourth quarter - potentially October alongside the new iPhone - and go on to sell 10m units of the product by the end of the year.