The next gen iPad will have a camera, but only to support Facetime. No matter how you look at it, there is no real reason to come out with a new iPad until Spring. There is no real competition to demand it and adding features cost money. The 7" iPad would be introduce at the same time. I like the concept, but there is a 50/50 chance it happens. Most of its sales would come at the cost of 9.7" iPad sales. I have no doubts that there is a prototype, but they would need a compelling case for Apple to bring it to market. it will need more than a smaller screen size to make that market case.