Apple is working on a mini-iPad that would allow it to better compete with smaller competitors from the likes of Amazon and Samsung, according to The Wall Street Journal.

The report said that Apple has shown designs for the device to its suppliers. It came amid expectations that the company will unveil a new iPad at a launch event in early March. That device is likely to be an iPad 3, similar in size to the current model but boasting faster processors and a higher-resolution screen, among other upgrades.

The new product reports come as Apple surges to ever greater heights on the strength of its existing line-up. This week its stock crossed the 500-dollar barrier for the first time, extending its lead as the most valuable company in the US. The stock has risen 24 per cent since the start of the year.

According to its latest earnings report, Apple made a record profit of 13 billion dollars in the fourth quarter of 2011, when it sold 37 million iPhones, 15 million iPads and 5 million Macs.

The milestone was passed even as reports emerged about officials in China seizing iPads after a court ruled that the device violated trademarks for the iPad name.

Proview Technology, which claims ownership of the iPad name in China, has reportedly asked customs officials there to ban all shipments of iPads in and out of the country in what would present a major difficulty to Apple, which manufactures its iPad in the massive Foxconn factories in Shenzhen and Chengdu.

In remarks Tuesday to an investor conference, Apple chief executive Tim Cook predicted that iPads and rival tablet computers would eventually become more popular than conventional PCs, with more than 55 million Apple tablets sold to date.

'From the first day (the iPad) shipped, we thought that the tablet market would become larger than the PC market,' Cook said during the Goldman Sachs Technology and Internet Conference in San Francisco. 'I feel that stronger today than I did then. ... It's on a trajectory that's off the charts.'