Taking aim at rivals Apple unveils mini iPad

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Jobs publicly declared seven-inch tablets being fielded against iPad would be dead-on-arrival; that was unless they included sandpaper, “so that the user can sand down their fingers to around one quarter of the present size.”

Industry analysts noted that given his oft clever tactics, the derision could have been a ruse by Jobs to discourage competitors while Apple had a smaller version of the iPad on the drawing board.

The iPad mini’s touchscreen measures 7.9 inches (20 centimeters) diagonally compared to 9.7 inches on the original iPad.

A 16-gigabyte version of the iPad mini with Wi-Fi connectivity costs $329, while a 16GB model with both Wi-Fi and cellular capability costs $459.

The top-of-the-line 64GB iPad mini with Wi-Fi and cellular connectivity will sell for $659. Like later versions of the original iPad, the new Apple tablet also features rear- and front-facing cameras.

“That is very cool,” Cook said of the iPad mini.

People can begin pre-ordering the iPad mini on Oct. 26 and Wi-Fi versions were set to begin shipping on Nov. 2 to about three dozen countries in Asia and Europe in addition to the United States.

Schiller said the iPad mini weighs 0.68 pounds, less than half the original, and is 7.2mm thick -- thinner than a pencil.

“Apple has always been a premium hardware manufacturer. It’s basically a hardware company and they don't have Google advertising or Amazon's online store to fall back on,” said Destination Wealth Management CEO Michael Yoshikami, according to Reuters.

“But people are happy to pay a premium because it’s quality hardware, and the ecosystem (of content and apps) cannot be underestimated.”

Apple also unveiled a fourth generation of the original iPad for the same starting price of $499 for a 16GB model with Wi-Fi connectivity.

Cook said Apple sold over 100 million iPads in two and a half years.

He added that more than 275,000 applications were now available for the iPad in Apple’s App Store and that customers have downloaded a total of more than 35 billion apps.

Apple set the tablet computer market ablaze with the first iPad in early 2010 and stuck with its 9.7-inch screen while rivals introduced lower-price tablets with screens closer to seven inches.

Amazon’s seven-inch Kindle Fire proved popular last year, and a new version was launched last month. Meanwhile, a Google Nexus 7 powered by Android software has since joined the Samsung Galaxy in the seven-inch tablet market.

While the cheapest iPad mini costs $329, less than the original iPad, the device is still considerably more expensive than the seven-inch tablets from Amazon, Google and Samsung -- which start at $199.

Independent technology analyst Jeff Kagan said the new, smaller iPad was a gamble for Apple in that it risked cutting into sales of the original iPad.

“Yes this will cannibalize some of the iPad, but pull the camera back and you can see how it will increase the size of the Apple customer base,” Kagan said.

“This will open up new segments of the market to Apple -- segments that would like an Apple, but which prefer a smaller screen or a lower price tag.”

Frank Gillett, an analyst with Forrester who attended the event, said he was impressed with the lightness of the iPad mini, with which he had a chance to play after the event.

“Apple went for the high end of what people have been thinking of,” Gillett said, adding Amazon and Google may have to adjust their own product lineups to compete with the iPad mini.

Apple shares ended the formal trading day down 3.26 percent to $615.25 but regained ground in after-market trades.

Some analysts believe the iPad mini was priced too high to fend off competition from Nexus 7 and Kindle tablets.

“Yes, $129 extra to be in the Apple ecosystem does seem pricey compared to the $200 alternatives,” said Forrester analyst Frank Gillett.

“However, you are inside the Apple experience and have access to the 275,000 iPad apps,” he continued. “If those things are important to you, it is a no-brainer. If you are really focused on Amazon’s content, then the Amazon product is going to be more appealing.”

Cook also introduced slick upgrades to Apple’s line of Macintosh computers, sales of which have outpaced the overall personal computer market for six years running.

Apple slimmed down its top-selling model, the 13-inch MacBook Pro, and gave it a “retina display” that boasts richer images than those on high-definition television sets. Starting price for the new MacBook Pro model was $1,699.

A new model iMac with the computing hardware built into its slim monitor promised to complement smartphones or tablets in modern lifestyles.

The new iMacs started at $1,299 with the first models available in November.

“What we see with this iMac is the early beginnings of redefining what we think about the personal computer in the world of mobile,” Gillett said.

“We will have a computer at home or work that picks up where we left off on our tablet, then puts it all back in when we walk away.”

The Kindle and Nexus 7 have grabbed a chunk of the lower end of the tablet market and proved demand for a pocket-sized slate exists. Those companies’ tablets -- the most successful other than Apple’s -- have forced Apple into a space it has avoided and at times derided, analysts say.

Amazon’s 7-inch Kindle Fire released last year for $199 was one of the hottest-selling holiday gadgets. It pressured Amazon’s margins but potentially garnered millions of new high-spending customers for the online retailer.

The Internet retailer has now launched its second-generation Kindle Fire HD, which it says is the “best-selling product across all of Amazon worldwide,” based on undisclosed U.S. sales figures and international preorders.

Google’s Nexus 7 tablet, built by Asian manufacturer Asustek, won top marks from reviewers and quickly ran out of stock after its July launch.

All three companies will be vying to get their devices on shopping lists during the U.S. holiday season, which traditionally starts next month.

Surveys conducted ahead of Tuesday’s news suggested some consumers had hoped for a more affordable Apple mini tablet.

The “starting sweet spot” for the tablet would be in the $249-$299 range, according to a survey of more than a thousand consumers by Baird Equity Research.

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