Shortly after it added more weight to rumours that Apple’s next-generation tablet — the iPad 3 — would ship with LTE support, the Wall Street Journal has reignited rumours of a smaller iPad, stating that the company is testing an 8-inch model.

According to the publication, Apple has been working with component suppliers in Asia to test a new tablet device that sports a smaller screen, suggesting that the company is intent on broadening its tablet line-up to appeal to consumers who crave a more portable tablet computer.

Sources working at some of Apple’s suppliers have been shown a smaller screen design for a new device that measures around 8-inches, with Apple currently lining up suppliers to assemble the new model. Both AU Optronics and LG Display are said to be helping test the panels, with the device rumoured to have a similar resolution screen as the iPad 2.

Given the rumour cycle around the iPhone 5, which was tipped to be the successor to the iPhone 4, it could be another device that Apple is prototyping and may never see a public release.

However, reports of an 8-inch device tie in with previous supplier claims that Apple would begin manufacturing a 7.85-inch tablet in 2012. In December, the company was rumoured to be sourcing parts, with production beginning in the middle of this year:

In addition to purchasing 7.85-inch panels from LG Display, Apple will also buy panels from AU Optronics (AUO), indicated the sources, adding that makers in the supply chain are likely to begin production of the 7.85-inch models at the end of the second quarter of 2012.

AUO previously fed speculation that Apple was designing a tablet device with a 7.85-inch display after a company leak in October. Such a move would go against Steve Jobs’ comments, which include: “10-inches is the minimum tablet size”, and “7-inch tablets are tweeners; too big to compete against a smartphone, and too small to compete with the iPad”.

Recent reports suggest that Apple will hold another of its high-profile media events on March 7 to introduce its next-generation iPad model. Dubbed the ‘iPad 3′, the tablet device is rumoured to sport a quad-core processor, an improved display and ship with support for LTE networks.

The Wall Street Journal stated that a person who had been briefed on carrier plans has told it that AT&T and Verizon will both be carrying the LTE version of the new Apple tablet.