Steve Jobs made major tablet mistake -

Apple founder and cargo-cult saint Steve Jobs might not have been as infallible as his followers believe. Jobs did not think that anyone would want to buy a tablet which was less than ten inches, declaring that they would be "dead in the water".

He claimed that ten inches was the perfect size and no fanboy would ever want anything smaller as their girlfriends would laugh at them. 

New figures on the sale of seven inch tablets have made a mockery of Jobs' consumer instinct infallibility. It shows that consumers were much more interested in smaller form factors in the first place.

This left a huge hole in the Apple line up which was swiftly filled by rivals including Amazon's Kindle Fire.

While Apple itself woke up to the fact that people wanted seven inches and issued their own tablet, that appears to have wasted the market for the larger model.

NPD DisplaySearch recently released some estimates on tablet panel shipments in January, and the data shows a huge drop in larger sizes nine inches and above accompanied by an increase in smaller sizes at seven to 8.9 inches.

Shipments of 9.7-inch panels fell dramatically from 7.4 million in December to 1.3 million January which is an  82 percent drop off.

Microsoft is now in the ever shrinking larger tablet market with its 10.6-inch Surface. The trends seem to suggest that this market is the kiss of death for tablets, so it probably is not something that Microsoft wants to celebrate. The fact Steve Ballmer lacks seven inches indicates that Microsoft's thrusting tablet plans may end up flaccid.

All this would suggest a good reason why Apple has reduced 9.7-inch panel orders from LG Display by 90 percent in January to just 600,000, while Sharp has nearly halted production of that size as well.

According to the Motley Fool, Apple has reduced its overall iPad build plans amid a shift toward the iPad Mini.

In December, DisplaySearch committed heresy by saying Apple would only sell 88 million units instead of 100 million. This is still a respectable feat, marking 34 percent unit growth from the 65.7 million iPads sold in 2012.

If the number of units being sold are cheaper, seven inch tablets, Apple has much less to celebrate. Fortunately for Apple the iPad Mini has a higher hardware gross margin than the larger model.

DisplaySearch estimates that the total panel market will jump from 160 million in 2012 to 254 million in 2013, with more than half of those displays going toward smaller devices.

One has to wonder what Apple would look like if Jobs had started with a 7.9-inch form factor and expanded up. It would have locked Samsung and perhaps Amazon out of the market before they even started.