Those whacky analysts are at it again, this time with a report that Apple is supposedly hard at work on a smaller version of the iPad for a first-quarter 2011 release.

According to Digitimes -- everyone’s favorite Taiwanese tech gossip site -- Apple is moving toward a smaller version of the iPad, expected to be available in the first quarter of 2011. That’s the word from Digitimes Research senior analyst Mingchi Kuo.

“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,” the website reveals.

Okay, we hear you saying: “There’s already a smaller iPad -- it’s called the iPod touch!” But this mini-iPad will supposedly fall in the five to seven-inch range, putting it squarely between the current models of iPhone & iPod touch and the iPad -- and taking on existing competitors such as the Archos 5 Internet Tablet and Dell’s forthcoming Streak.

Switching gears to Apple’s just-launched iPad, the Digitimes Research analyst believes that Hewlett-Packard’s upcoming HP Slate actually has a good chance of impacting iPad sales, but also believes that the Slate is “unlikely to provide a competitive portable experience to the iPad, since it uses an Intel processor, which consumes more power.”

The HP Slate is scheduled to launch in mid-2010 -- by which time Apple’s iPad should have a pretty good foothold in the tablet world, we figure.