The first buyer of an iPad 2 holds up his device at an Apple flagship store at Xidan in Beijing, May 6. Apple's iPad 2 went on sale on the Chinese mainland on May 6. [Photo / Xinhua]

Apple is preparing for production of the next generation of its iPad tablet computer to be released in early 2012, Forbes reported on its Web site Tuesday.

The report said Apple has placed orders for parts for about 1.5 million iPad 3s in the fourth quarter with its component suppliers and assembly contractor. The next-generation iPad will have a 9.7-inch screen and higher resolution display – 2048 by 1535 pixels, compared with 1024 by 768 on the iPad 2.

Apple will reportedly drop the price of the iPad3. The cheapest iPad is now available for $199. Apple's competitors, such as Acer and ASUS, have launched cheaper tablet computers. A small drop in prices of the iPad3 might spur more potential users to choose Apple's product.

Meanwhile, Apple is reportedly planning to invest US$1 billion in a Sharp LCD plant to secure displays for its iPhones and iPads, Reuters said.

China's business press carried the story above on Tuesday.