Although most iPad/iPhone rumors are met with a great deal of skepticism, rumors concerning a possible iPad Mini are met with even more skepticism. Between Steve Job’s famous proclamation about smaller tablets feeling like giant smartphones and the fact that iPad Mini rumors have been around for years, it’s understandable why many think that Apple will never actually produce a smaller iPad.

But the rumors persist, and today market researchers TrendForce say that smaller iPads (the currently labeled iPad Minis) are in the testing phase. If they were to actually enter production, they say, we’d be looking at a Q4 2012 release date sometime around Christmas.

Here’s what TrendForce had to say about the iPad Mini, as quoted by CNET:

If production ensues, the release time will possibly be in 4Q12, right before Christmas. With a smaller size and a resolution of 1024×768, as opposed to iPad 3’s 2048×1536, the small iPad will not hurt iPad 3’s sales in 2012 and will have a bigger impact in 2013.

With the iPad 3 widely expected to surface at a March 7th launch event, a Christmastime iPad Mini would only be able to steal the iPad 3’s thunder from the holidays and beyond – into 2013. And even if an iPad Mini were to actually be produced, how much would it cut into the iPad 3’s margin?

The persistence of this rumor and people’s interest in it proves that the concept of a 7-inch iPad is not superfluous to most. For those who find the 10-inch model cumbersome but want something more than a 3.5-inch iPhone, something in between would be ideal. The most recent example of a successful 7-inch tablet is Amazon’s Kindle Fire – a device that would surely be threatened by a smaller iPad (although Amazon is rumored to be working on a 10-inch Kindle Fire).

This is not the only time in recent memory that we’ve heard talk of a possible late 2012 iPad Mini. Another research analyst said with certainty that we would see a 7-inch iPad by Christmas:

“I believe that’s always been in the plan,” Technology Business research’s Ezra Gottheil said. “Actually, that’s a good form factor for some users, and although they will also charge a premium above other similar-sized tablets, they want to protect that price flank.”

Do you think a smaller iPad is necessary? Let us know in the comments.