Preview at WWDC likely in June, followed by September launch.
7.85-Inch iPad to Ramp Up Production in September at Foxconn Brazil
According to Chinese reliable source, the tablet called iPad mini will be produced in Brazil, however production test to collect data for new cutting machine is already done in China.
Source said that, production phase of this tablet will be started since September, and this tablet should be shipped until holiday season, but announcement will not be so soon.
Mockup of 7.85-inch "iPad mini" next to iPad 2
The smaller version of the tablet is said to include 3G capabilities. Other details remain a bit fuzzy, but the source who claims to have seen a prototype reports that the device will be thinner than rivals including the Kindle Fire. The device is said to be as thin as the 4th Generation iPod Touch.
Multiple sources have now claimed that Apple is coming out with a miniaturized version of the iPad this fall. The most recent report from Bloomberg pinpointed an October launch for the device.