A Chinese paper, the Economic Daily News, is reporting that production has started on 7-inch iPads due for release in Q1 2011. The paper also details some of the new features to expect in the iPad successor, including front and rear facing cameras, and a USB port for connecting external devices.

The report also alluded to new screen and touch technologies but did not elaborate on what these technologies would be. Could it be that Apple has circumvented its issues with our fat fingers by employing a new and more sensitive touchscreen tech?

This is far from the first iPad 2 rumours we've heard, and the Q1 timing isn't too great a stretch of the imagination when you consider that Apple is likely to update the product line 12 months after it released the original. It should be noted also that the Economic Daily News was one of the first news sources to predict that Apple was developing a tablet at all.