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Apple unwraps mini-iPad to take on Amazon, Google

Apple Inc will begin to sell an eight-inch version of the iPad tomorrow to compete with Amazon.com Inc’s Kindle and other smaller tablets, but it set a higher-than-expected price tag of $329 that Wall Street fears could curb demand.

The 7.9-inch “iPad mini” marks the iPhone-maker’s first foray into the smaller-tablet segment. Apple hopes to beat back incursions onto its home turf of consumer electronics hardware, while safeguarding its lead in a larger tablet space – one that even deep-pocketed rivals like Samsung Electronics have found tough to penetrate.

Apple chief executive Tim Cook and marketing chief Phil Schiller took the wraps off the new tablet, which essentially has most of the functions and features of the full-size iPad but in a smaller package.

Priced at $329 for a wi-fi only model, the iPad mini is a little costlier than predicted but some analysts see that as a bid to retain premium pricing levels. Others fear the gadget will lure buyers away from Apple’s $499 flagship 10-inch iPad, while proving ineffective in combating the threat of Amazon’s $199 Kindle Fire and Google’s Nexus 7, both of which are sold at or near cost.

The iPad was launched in 2010 by late Apple visionary Steve Jobs and since then it has taken a big chunk out of PC sales, upending the industry and reinventing mobile computing with its apps-based model, often called an ecosystem.

A smaller tablet is the first device to be added to Apple’s compact portfolio under Cook, who took over from Jobs just before his death a year ago. Analysts said it may have been Google and Amazon that helped influence the decision.

In a surprise move, Apple also announced on Tuesday a fourth-generation full-sized iPad just six months after unveiling a third generation device to much fanfare.

The latest tablet, which again sells for $499, is faster and slimmer and comes just days before Microsoft is due to show off its own “Surface” tablet.

Apple also unveiled thinner MacBook Pro laptops, including a 13-inch Retina display. Frank Gillett, an analyst with Forrester who attended the event, said he was impressed with the lightness of the iPad mini.

“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.

Underscoring how competition is intensifying, Schiller painstakingly outlined how the iPad mini matched up against the Nexus 7. At the event in San Jose‘s luxurious California Theatre, the marketing honcho detailed feature by feature why he thought the iPad mini superior.

It is unusual for Apple to single out a specific competitor in its product launches. In another rarity for a company that tightly controls events, it live-streamed its presentation to Apple devices such as the iPad and Macintosh computers.

“Theirs is made of plastic,” Schiller said, referring to the Android tablet. “The entire Android product is thicker and heavier.”

Schiller later defended Apple’s pricing of the iPad mini, telling reporters he expects consumers to recognise quality and pay for it.

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