Apple Unveils 7.9-inch iPad Mini, New Macs at California Press Event

NEW YORK | Tuesday, October 23rd, 2012 2:45pm EDT

Apple Inc took the wraps off an 8-inch tablet on Tuesday in its biggest product move since the debut of the iPad two years ago, launching a smaller version of the tablet into a market staked out by Amazon.com Inc and Google Inc.

Apple Unveils 7.9 inch iPad Mini at California Event 01

Phil Schiller, Apple’s senior vice president of worldwide product marketing, introduces the iPad Mini in San Jose, California on Tuesday, October 23rd, 2012. Photo: Apple Inc.

Apple Inc. executives on Tuesday unveiled a smaller iPad tablet as well as updates to the company’s Macintosh computers and larger iPad, as the technology giant seeks to prove it is still ahead of the curve.

Executives took the stage to introduce the iPad mini, a tablet with a 7.9-inch screen that weights half as much as the larger iPad, which it resembles. The iPad mini has two cameras, a dual-core A5 processor and 10-hour battery life. It comes in both Wi-Fi only versions and models with LTE wireless connectivity.

Apple said pricing for the iPad mini would start at $329 for a version with 16GB of memory and Wi-Fi only wireless, which would price it above some rival tablets of similar size. It will be available starting Nov. 2. They also showed a new version of the larger iPad, with a 9.7 inch screen, with hardware improvements but the same prices as their predecessors.

The executives began their presentation in San Jose, Calif., by showing a thinner iMac desktop computer, a new 13-inch MacBook Pro laptop, and an updated Mac Mini, a small computer that costs $599 but doesn’t include a screen.

The iPad mini would compete squarely with devices like Amazon.com Inc.’s Kindle Fire and Google Nexus 7, already on the market. These and other roughly 7-inch devices from Samsung Electronics Co. and others will account for about a 5th of the tablet market this year, according to Piper Jaffray.

But the growing number of smaller tablets and the marketing muscle tech giants are putting behind them puts Apple in a defensive position. Some investors are wondering whether Apple is losing some of its edge as a trendsetter.

“The single biggest concern I hear is Apple has perhaps lost a step on the innovation front,” said Will Power, senior analyst with Robert W. Baird & Co. “That is the secret sauce at Apple, and if they don’t stir that, that is going to create problems.

Developers, designers and analysts say Apple has plenty of room to wow. Mark Rolston, chief creative officer for San Francisco-based design firm Frog Design Inc., said the first round of seven-inch tablets are “pretty chunky” and focused on undercutting the iPad on price.

The Kindle Fire starts at $159, and the iPad’s latest model starts at $499. Mr. Rolston said he doesn’t “think people will be that impressed” with the hardware of the new device. But he believes the device will sell due to Apple’s focus on software and functionality and marketing.

“No one has really put a story behind it,” he said. “They took the phone and made it bigger or the tablet and made it smaller and neither is really the right idea.”

Frog doesn’t currently do business with Apple but helped design early Apple computers in the 1980s.

Neither Amazon nor Google discloses tablet sales figures. An Amazon spokesman said that the $199 Kindle Fire HD has been the best-selling product on Amazon since its launch this fall. A spokeswoman for Google declined to comment.

The new Apple tablet’s biggest competition could be the larger Apple iPad. The device, which has a screen length of 9.7 inches, has more than withstood the competition.

Apple’s share of world-wide tablet shipments grew to 68% in the second quarter up from 63% in the first, according to IDC. Amazon’s share rose to 5% from 3.9%.

Simon Khalaf, CEO of mobile analytics firm Flurry, said a smaller iPad will be used for many of the same things as the larger iPad, like gaming, reading and watching video. He said a smaller tablet could also appeal to schools and teachers, although the education industry is trickier because it is regulated.

Apple investors will be watching closely for the potential of a new device to goose sales. But they will also be dissecting what it shows about how the company is innovating. Reviewers and consumers have praised the iPhone 5 for its performance and its sleeker shape. But some reviewers, consumers and investors say that there is little overwhelmingly different about the device. Apple has said the device, which went on sale in September, saw record initial sales.

The fact that consumers held out for the new iPhone 5 led to a rare earnings miss last quarter. Apple will issue results for the period ended in September on Thursday. The quarter is expected to include about a week of iPhone 5 sales.

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