7 inch iPad on the way?

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RUMOUR MILL: We have been hearing rumors that there might be some sort of a smaller iPad on the way but now these rumours are starting to seem more true. A DigiTimes article says that this smaller iPad is due to be realised around the end of the year and is set to feature a 1024×768 pixel 7″ IPS display, be powered by a Cortex A9 processor paired with 512 MB of RAM.

I am wondering, if this is actually true, whether this turn into the iPad 2nd Gen because of the original iPad’s complaints about usability or whether this will turn into some sort of iPad Nano.