After digesting that boulder-sized grain of salt, here’s the latest rumor out of Taiwan.

A report from UDN (via Unwired View), claims manufacturers LG Display and AU Optronics have sent samples of 7.85-inch “iPad Mini” displays to Apple for approval. Apple has apparently already approved specifications for the device and the report claims it could ship as early as next year. Perhaps Apple execs don’t any longer share Jobs’ view that a 7-inch model would be “useless” or “dead on arrival”.

A rough translation of the report seems to mention the same resolution as iPad 2 but also notes 52% increased resolution “per unit area” for the smaller iPad variant. It also mentions “lower prices” and “emerging markets” as the motivating factor for Apple. We already know how Steve Jobs felt about the possibility a 7-inch iPad. After his sandpaper comment (above), Jobs continued:

Then again, this wouldn’t be the first time Apple has gone ahead with plans that Steve Jobs had previously rallied against. Prior to the launch of iBooks and Newsstand, Jobs famously said people don’t read anymore, and he was also quoted as saying no one wants to watch video on an iPod. We now know how both of those ventures ultimately turned out for Apple.

Here’s Jobs full statement regarding a potential 7-inch iPad:

[youtube=http://www.youtube.com/watch?v=qjt-y5EbJw0&feature=player_embedded]