Apple will need to fight fire with fire if they want to compete with the $199 Amazon Kindle Fire tablet next year, and it seems they will do just that. Rumor has it that Apple are expected to launch a 7.85-inch iPad sometime in 2012, according to sources in the supply chain.

Global shipments of tablets are expected to hit 60 million in 2011, with 70-percent of those iPads. Apple is expected to launch a next-gen iPad before the end of Q1 2012, said the sources. Secondly, Apple are rumored to be launching competition to the 7-inch Kindle Fire from Amazon, with a 7.85-inch iPad.

It is said Apple were "persuaded" into it because of the Fire. 2012 will be an interesting year for Google, Amazon and Apple, I think.