The rumor mill for Apple’s iPad 3 seems to be gearing up, with a new DigiTimes report that the company will adopt IGZO (indium gallium zinc oxide) flat panels for the next-generation tablet.

“Starting with the new iPads, Apple will utilize IGZO panels from Sharp in order to upgrade the display resolution of the new tablets to full HD level,” wrote the publication Dec. 30, quoting unnamed sources in Apple’s supply chain. “To enter the supply chain of iPads, Sharp has switched some of its capacity for large-size panels to the production of small-size panels for smartphones and tablet PCs.”

Whether that report turns out to be correct—if the iPad has proven anything over the past two years, it’s that any prerelease rumors should be taken with a veritable dump-truck’s worth of salt—rumors about the iPad have certainly picked up in recent weeks.

On Dec. 29, DigiTimes reported that Apple would unveil two iPad models in January. “Apple is set to unveil its next-generation iPad—which will come in two versions—at the [MacWorld/iWorld expo] scheduled for January 26, 2012,” read the Dec. 29 report, citing unnamed supply-chain sources. “The new models will join the existing iPad 2 to demonstrate Apple’s complete iPad series targeting the entry-level, mid-range and high-end market segments.”

A lower-cost iPad 2 will apparently compete head to head against Amazon’s Kindle Fire, a 7-inch tablet that acts as a portable vending machine for the online retailer’s e-books and streaming content. Meanwhile, according to the report, the new iPads will feature higher-resolution screens and “dual-LED light bars” to “strengthen the brightness of the panels.”

Apple watchers will recall that, ahead of the respective launches of the iPad and iPad 2, the rumor mill geared itself into a white-hot tempo. Many of those rumors, once the devices were unveiled, proved thoroughly inaccurate. Nonetheless, massive consumer and business interest in the tablets all but guarantees an equivalent amount of scuttlebutt ahead of their release. It is widely expected that Apple will hew to the schedule of past iPad releases, and issue the latest version sometime early this year.

In 2011 Apple continued to dominate the tablet market. The late Steve Jobs introduced the iPad 2 March 2. “Is 2011 going to be the year of the copycats? I think if we did nothing, maybe a little bit,” he told the audience. “But we haven’t been resting on our laurels.” Over the next few quarters, a variety of competitors—including the Motorola Xoom and Hewlett-Packard’s TouchPad—suffered from anemic sales, seemingly solidifying Apple’s lead in the short term.

But the company will also face significant competition in 2012. Not only will rival manufacturers continue to produce Google Android tablets, but Microsoft is prepping a series of Windows 8 tablets targeted at both the consumer and business markets.