Analysts from Piper Jaffray have stoked the rumours, claiming that Apple is to finally launch its tablet device in early 2010 for less than $700 (£450).
Apple's tablet computer will challenge Amazon's Kindle and Sony's E-reader as well as firms producing low cost netbooks such as Acer and Asus.
Speculation about Apple's tablet device refuses to completely disappear, despite acting CEO Tim Cook's words in April that Apple had no intention of creating a cheaply made, low-powered netbook device with a dumb-downed user experience.
The report said evidence is stacking up to indicate Apple, if not preparing to launch, is investing substantial time and money into such a device.
Piper Jaffray analyst Gene Munster based the prediction on information from contacts in China, where the device would likely be built and recent Apple patents that indicate the company is working on a multi-touch screen, between seven and 10 inches wide.
Apple's acquisition of computer chip manufacturer PA Semi and other chip-related hires also weighed heavily on Munster's report.
The reports do not contradict Cook's words last month that Apple would not enter the netbook market.
Instead, the tablet device would carve its own niche in the mobile computing market, riding on the strength of the Apple brand and the popularity of the iPod and iPhone.
It would likely integrate existing software, such as Apple's Safari web browser or its iTunes App Store, used for email, games, reading books and watching movies.
Its price point is likely to strike between the iPod Touch and the MacBook, with reports predicting a $700-$1,000 range.
Earlier rumours in December last year speculated that the device would launch in autumn 2009, but new information suggests that the company has pushed back the date until early 2010.
Next month, Apple is hosting its annual developers conference where it is anticipated to launch a new version of the iPhone.