Now who wants Google’s Nexus 7 tablet? Although a 7-inch iPad will almost certainly cost more than $199, Apple’s superior iOS mobile operating system, massive app + peripheral ecosystem and unrivaled customer satisfied make price almost irrelevant. Still, there are plenty of questions unanswered about this potential Apple master stroke.

Bloomberg is reporting big fireworks as we roll into America’s Independence Day celebration. Quoting “two people with knowledge,” the business new service says that Apple will ship a 7-inch iPad this Fall, most likely in October before the start of the Christmas shopping season.

Call it the iPad mini

with a 7-inch ipad, apple will suck any remaining oxygen out of the tablet market.
Rumors of a 7-inch Apple tablet have circulated since 2010.

The new model will have a screen that’s 7 inches to 8 inches diagonally, less than the current 9.7-inch version, said the people, who asked not to be identified because Apple hasn’t made its plans public. The product, which Apple may announce by October, won’t have the high-definition screen featured on the iPad that was released in March, one of the people said.

Bloomberg and its informants don’t offer guidance on pricing, though it will almost certainly cost more than $199 — where Google and Amazon have staked their claim to the small form factor tablet market. That said, the iPad 2 is currently tagged at $399, so the obvious price point for a 7-inch iPad is $299.

“It would be the competitors’ worst nightmare,” said Shaw Wu, an analyst at Sterne Agee & Leach. “The ball is in Apple’s court.”

Whatever momentum Amazon’s Kindle had is gone in a vapory mist. Google’s Nexus 7? It’s now at best just an after thought that will only be remembered if Apple doesn’t ship a 7-inch iPad come October.

Ready to buy a 7-inch iPad?