Apple 7-inch version with cameras coming 2011?

We've already heard rumours that Apple is working on a 7-inch version of its iPad to build on the success of the first version and fend off challenges from the likes of Samsung and it's Galaxy Tab tablet, but now more information has come to light.

According to a research note put out by Rodman & Renshaw analyst Ashok Kumar this morning Apple, may be looking to develop a new version of iPad, this one with a 7-inch screen in 2011 reports Gigaom.

Kumar claims that based on his research the second generation iPad will have both front and rear facing cameras to make it easier for video conferencing on the device, using Apple’s Facetime.

It's not the first time analysts have suggested a smaller version of the iPad is coming.

In April Digitimes Research whose senior analyst Mingchi Kuo, believes that's what's on Apple's mind too.

Digitimes is reporting that "Kuo, citing talks with upstream component sources, said Apple's smaller-size iPad will be priced below US$400 and will target the highly-portable mobile device market and consumers that focus mainly on reading and do not have a high demand for text input".

At the time Digitimes suggested a 2011 launch as well.

What do you think?