Apple Inc. (Nasdaq: AAPL) may unveil a smaller version of the iPad at an event on Oct. 23, according to a person familiar with the matter who asked not to be named because the plans aren’t public.

The new model will have a screen that’s 7 inches to 8 inches diagonally, less than the current 9.7-inch version, people familiar with the designs said in July.

A smaller, less expensive iPad could undercut the tablet ambitions of Google Inc., Microsoft Corp. and Inc., according to Shaw Wu, an analyst at Sterne Agee & Leach Inc. Google’s Nexus 7 tablet and some versions of Amazon’s Kindle Fire with 7-inch screens cost $199. Apple will likely price the mini at $299 or $349, Wu said.

“These competitors have a tough enough time competing against the 10-inch iPad,” Wu said in a telephone interview today. The lower-priced iPad model “will make the competition even tougher. It tells you how hard it is to beat Apple. These other companies have to either lose money or break even on these products.”

Trudy Muller, a spokeswoman for Cupertino, California-based Apple, didn’t return a call seeking comment.

While the smaller iPad may hamper market entries by Google and Microsoft, it may also attract price-conscious consumers who might have otherwise bought another Apple product, such as the $299 iPod Touch or the $399 iPad 2, said Brian Marshall, an analyst at ISI Group.

‘Cannibalize Sales’

“What’s this going to do to iPod Touch sales?” Marshall said in an interview. “Is this going to cannibalize them? How are they going to fit this in and how is it going be different from their other products?”

Since the iPad went on sale in April 2010, Apple has dominated the tablet market, which is predicted by DisplaySearch to reach $63.2 billion this year. Apple has 61 percent of the market, according to Gartner Inc.

Google announced plans in June to debut the Nexus 7. In July, Microsoft unveiled a tablet called Surface that will have a screen size similar to the current iPad. Amazon’s Kindle Fire was released last year, and the company last month previewed a variety of new models at various sizes and price points.