The rumor mill continues to churn ahead of Apple’s expected announcement of the next-generation iPad in March. On Wednesday, the Wall Street Journal reported that its sources said Apple is testing an iPad with a smaller screen and is looking to sell a 4G-capable version through Verizon and AT&T.

On the smaller tablet front, which has been oft-discussed since the original iPad hit the market two years ago, Apple is said to be showing its suppliers designs for an iPad with an 8-inch screen, compared to the 9.7-inch one currently on the device. The resolution is expected to be the same, while a third-generation iPad would have better resolution.

Of course, as the Wall Street Journal pointed out, Apple could decide not to move forward with a smaller iPad, but Diana Wu, a Capital Securities analyst, said: “Samsung’s 5.3-inch Galaxy Note and Amazon’s 7-inch Kindle Fire have been selling well. It means consumers want a tablet that is smaller than the existing 9.7-inch iPad. iPad’s features are good enough but pricing would be an important factor in the mass market, especially in big emerging markets like China and India.”

Meanwhile, Verizon and AT&T are rumored to be gearing up to sell an iPad that will run on their 4G networks, according to the Wall Street Journal’s sources, who had no insight into whether Sprint and T-Mobile could be involved too. Verizon and AT&T are the only two U.S. carriers currently selling the iPad.

The carriers are said to be eager to get the new iPad running on its next-generation cellular networks because they’re more efficient and faster with data delivery. Richard Doherty, director of research firm Envisioneering Group, told the WSJ: “The new iPad will test carriers to see how robust their networks are.” He noted that the average iPad 2 owner uses, on average, four to eight times the amount of data as an average iPhone owner.