Though the iPad Mini has long been a creature of myth and legend – okay, maybe just rumor – there are increasingly reliable signs that point to the possibility that Apple may actually be working on a smaller version of their venerable iPad. Last month there were reports from a Samsung exec who claimed that his company would be producing the displays for a smaller iPad. Before that, there were reports that production of a 7.85-inch iPad Mini would begin sometime in the third quarter of 2012.

Now there appears to be confirmation that the iPad Mini is in development, and this time from a much more reliable source. Speaking on The Talk Show with Dan Benjamin John Gruber of Daring Fireball confirmed that Apple does indeed have a 7.85-inch iPad in development, though he said it may never see the light of day.

About an hour and eighteen minutes into the interview (which you can listen to by following the link above), Benjamin asked Gruber, “Is Apple coming out with a 7-inch iPad, and if not, why not?” Gruber discussed the issue at some length, but here’s his initial reply:

Well, I don’t know. What i do know is that they have one in the lab. … [A] 7.85-inch ipad that runs at 1024×768 and you just get the 9.7-inch iPad shrunk down a little bit. Apps woulnd’t need to be recompiled or redesigned to work on it, it’s just the iPad smaller.

It’s worth noting that this smaller iPad’s pixel dimensions – 1024×768 – are the same as those of the iPad 2, which means that the iPad Mini (or whatever they choose to call it) will have higher resolution than the iPad 2, but not a retina display. Gruber suggested that to to get an idea of what a 7.85-inch iPad would look like, you can take a screenshot of your iPad while it’s in portrait orientation, then when you view the screenshot, turn the iPad to landscape orientation. The smaler screenshot is roughly what a 7.85-inch iPad would look like. The iPad Mini’s height would be about the same as the current iPad’s width.

He went on to say that there is currently no timeframe for shipment, and stressed that Apple may never ship the device at all. He reiterated Steve Jobs’s famous pronouncement that he was as proud of the products Apple didn’t release as he was of the products they did. The question Apple is asking themselves, he said, is not “why shouldn’t we release this?” it’s “why should we release this?”

Gruber went on to speculate that the iPad Mini could conceivably be unveiled at WWDC during the summer, though he stressed that that is only speculation. He also spoke about the next iPhone, which he believes is now on a fall release schedule, and will not be coming during the summer any more. Historically, Apple has announced the iPhone at WWDC during the summer. Last year’s iPhone 4S was delayed until October, however. Though some have speculated that Apple would return to a summer release schedule with the next iPhone, it is generally agreed that Apple will maintain a twelve month window between releases and launch the next iPhone in September or October.

What do you think? Would you by a 7.85-inch iPad? Do you think Apple will really relase one? Let us know in the comments.

[Hat tip: MacRumors]