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More iPad 3 rumor goodness: 16GB & 32GB models coming, 8GB iPad 2 ready as well

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With Apple’s iPad 3 event scheduled for Wednesday, March 7, the rumor mill concerning the world’s most popular tablet has gone into overdrive.

So far, we’ve heard that the iPad 3 will be slightly thicker to accommodate several new features, including a higher-resolution Retina Display, improved cameras, and the inclusion of LTE 4G technology. Other rumors about the new iPad suggest that the unit will offer a new quad-core A6 processor to replace the iPad 2′s dual-core A5 chip.

Now, according to a new report by Taiwanese publication Digitimes, Apple will likely launch two iPad 3 models — a 16GB edition and 32GB version. While those hard drive capacities aren’t new, it would be surprising for Apple to no longer offer its 64GB capacity, which it offered for both the iPad and iPad 2. The only reason Apple would discontinue making a 64GB model is if only a minuscule number of consumers picked up that model.

Additionally, the report suggests another Apple change-up with a cheaper 8GB iPad 2 to be unveiled during the iPad 3 event. In theory, a cheaper version of the iPad 2 could help attract penny-pinching consumers that have opted for the less-expensive Amazon Kindle Fire, Barnes & Noble Nook Tablet, or some other low-end $199 Android tablet. There’s also the looming threat of Windows 8 tablets that will be released later this year.

While Digitimes fanned the rumor flames for the iPad 3 event, it also pushed out an article today suggesting Apple would begin production on a smaller 7.85-inch iPad in the third quarter. We’ve heard that rumor a few times before, but as we noted above, competition in the tablet market is heating up, so it’s not unimaginable for Apple to explore a smaller form factor.

Would you be interested in grabbing a less-expensive 8GB iPad 2 or an iPad with a smaller form factor?

iPad photo: bfishadow/Flickr