Feverish speculation all over the internet, gadget shoppers nearing mass hysteria, and pundits predicting our lives will never be the same. It must mean that an Apple product launch is on the way.

The company that makes the Mac computer, iPod music player and iPhone is reportedly poised to launch a tablet computer – small enough to carry in a handbag or briefcase but big enough to surf the web, read newspapers and watch films comfortably. It could be Apple’s latest billion-dollar jackpot.

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Months of rumor and hype have reached a crescendo in recent days, with some reports suggesting that the tablet could be launched by Apple’s chief executive, Steve Jobs, next month and be in the shops by Christmas. The fascination with Apple is that blogs are humming with speculation, and a new mention of the tablet crops up on Twitter around every eight minutes.

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“The Apple magic is great technology and great marketing,” said Leander Kahney, a blogger and author of The Cult of Mac. “We’ve seen it with the iPod, the iPhone, and, before that, the Mac. That’s why this is so exciting.”

He added: “They’ve been working on this for the past six years. People expect it to be the ultimate Apple surprise. This thing will knock people’s socks off.”

Apple product launches are celebrated rituals where the talismanic Jobs, in black sweater and jeans, stands on a stage in San Francisco and unveils the company’s latest innovation, cheered by adulatory crowds with near-religious fervor. The Californian giant has sold more than 200 million iPods since its launch in 2001.

Famously secretive, Apple has refused to comment on tablet speculation. But Tim Cook, its chief operating officer, recently hinted that the company was working on something “very innovative.” Now back at work after a six-month leave of absence following a liver transplant, Jobs is thought to have been personally involved in the development of the device over the past two years.

The tablet is rumored to be any size and scale between the iPhone and the MacBook laptop. Some have described the tablet as a “Kindle-killer,” potentially usurping the Amazon Kindle and other electronic book readers. It would be billed as a solution for people who work a lot on the move but don’t want to carry a laptop. Experts believe would set the tablet apart would be that it would use a touch-sensitive screen instead of a keyboard. Kahney said: “Apple will totally rejig the computing experience. You won’t manipulate a keyboard and mouse anymore but rather use an intuitive touchscreen. It will be very tactile. It will be a whole new paradigm.”

It might also prove the launchpad for an “iTunes for newspapers,” allowing commuters to read news on the screen instead of in print. Even magazines might be reproduced convincingly on the high-resolution screen. Kahney said: “Instead of reading a review of a band, you could have audio and video embedded and listen to them and watch them being interviewed.”

Expectations flared recently when Gene Munster, a technology research analyst, said that he had had discussions with an Asian component supplier that claimed to have received orders for a touchscreen device that needed to be filled by the end of the year. Munster took this as evidence that Apple would launch a tablet in early 2010.

He estimated that an Apple tablet with an onscreen keyboard like the iPhone would cost around $600 (£363), putting it between the highest-end iPod Touch at $399 and the MacBook, which starts at $999. At $600, Munster calculated that sales of 2 million tablets could add $1.2bn (£727m) to Apple’s sales next year.

Sales of Apple laptops are stalling as they face competition from netbooks, the smaller and lighter laptops that have proved popular among students. Rival companies have also introduced tablets but lack the hype that guarantees Apple mountains of free publicity.

However, Bill Thompson, a technology author, and blogger warned that Apple’s run of dramatic breakthroughs was unlikely to last forever. “If Steve Jobs stands up and announces this, it could be his last hurrah. The technology industry has matured and, unless Apple does something completely unexpected, we have a pretty good idea of what this will look like. The world has to be