Rumours have been circulating for several months now on whether there will be a new addition to the Apple evolution, specifically, the nicknamed “iTablet”.

Engineered to sit between an iPhone and touchscreen MacBook, the highly anticipated tablet has been dubbed as the “iPhone on steroids”, referring to its ability to play movies, read books and more.

Endless stories, rumours and theories have been abuzz on Apple’s soon to be released new gadget, including whether it will include a camera or not.

And according to Piper Jaffray analyst Gene Munster, it is expected to sell anywhere between $500 and $700.

Debates over the actual size of the device have itself been in abundance, with sizes expecting to range anywhere between 7 to 10 inches. Dena Cassella suggests thinking of it as “small enough to carry in a handbag, but too big to fit in a pocket”.

Nick Gold, sales manger at Chesapeake Systems, believes the iTablet will fill the usability gap between smartphones and notebooks. “A laptop doesn’t offer the experience of an elegant digital note pad with Internet access, nor does an iPhone serve for anything but the tersest of notes. A tablet could potentially address this middle space quite well,” he says.

Another factor yet to be determined, is whether the iTablet will cease the end of the Kindle and other e-book readers. Shane Spiess, president of MacForce believes the iTablet will have the capability to do everything a Kindle can do. “It’ll be a success if it allows me to access basically everything I own, from magazines and books to movies and television shows, no matter where I’m at” he says.

Pending the rumours are true, the iTablet will have the functionality to do anything the e-reader can do, along with having access to applications and the web.

Having already achieved a huge amount of success with the iPod and iPhone, it is highly likely that the Apple iTablet will render much of the same enthusiasm and acceptance.

A media launch scheduled later this month is set to unveil the new product as well as clarify all those rumours and theories. The question that will remain however is, will customers still buy a Kindle, iPod, or laptop, when the iTablet can do the lot?