The rumours of Apple stepping into the smaller tablet space with the Apple iPad Mini possibly on the cards continues to gain steam, with the latest piece of speculation coming from an analyst that predicts that Apple will halt making the Apple iPad 2 and will replace the iOS slate with the Apple iPad Mini.

According to an article over on Investors, Pacific Crest Securities analyst Andy Hargreaves has apparently stated he expects Apple to deliver the Apple iPad Mini sometime in October, and that the iOS tablet will have a 7.85-inch display, and that the mini iPad would probably start at 8GB of flash storage and command a price tag of 299-bucks.

Hargreaves further wrote in a research note on Thursday that Apple will probably stop making the Apple iPad 2 line and make the Apple iPad Mini line their new entry-level iOS slate.

The smaller iOS tablet would give Apple a device that would compare with the smaller rival Android tablets from Google and Amazon, as Google has now unveiled the Google Nexus 7 tablet with a price tag of $199, whilst Amazon is expected to unveil the Amazon Kindle Fire 2 reasonably soon.

Apparently Pacific Crest Securities believes there will be a rapid uptake of the new Apple iPad Mini, and estimate the company will sell in the region of 10 million Apple iPad Mini tablets in its first fiscal quarter ending in December, and for the fiscal year ending September 2013, they estimate Apple will sell 35.2 million iPad Mini slates.

Pacific Crest also predicts that the smaller iPad will have an effect on full sized iPad sales, and thus anticipates a 25 percent cannibalisation of sales of the bigger iOS tablets, meaning for every four iPad Mini’s sold one less full sized iPad will be sold.

So there you go, it appears that if or when Apple delivers a smaller iPad the iPad 2 will see end of life. So will any of our iOS readers be opting to snap up a smaller iPad over a full sized iPad in future?