Apple Launches iPad Mini

by Mark Walsh, Oct 23, 2012, 4:08 PM

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Ending months of avid speculation, Apple has unveiled a new, smaller version of the iPad aimed directly at rival tablet devices like Amazon’s Kindle Fire and Google’s Nexus 7. As expected, the iPad Mini sports a 7.9-inch screen in contrast to its 9.7-inch predecessor. It offers similar features like a front-facing camera and 10-hour battery life.

The 16 GB version will sell for $329, with 32 GB model priced at $429, and the 64 GB, $529. Early rumors online suggested that Apple might keep the price below $300 to better compete with the $199 Kindle Fire HD and Nexus 7.

During the launch presentation, Apple executives noted that the borders had to be reduced, compared to the original iPad to maximize the display. “Light as a pad of paper,” is how Phil Schiller, Apple’s marketing chief, described the new device that comes in at half the weight of the iPad 3.

The mini also offers a Multi-Touch screen (not Retina), an A5 processor, FaceTime HD and 5 megapixel iSight cameras, and Wi-Fi support.

The mini is substantially less expensive than the $499 iPad, but the $329 price could make it harder for Apple to lure consumers away from cheaper 7-inch tablets. There have also been rampant rumors that Google plans to introduce a $99 Nexus tablet this quarter, upping the ante on aggressive pricing.

One key advantage Apple has is its large advantage in iPad-customized apps, with 274,000 available via the App Store that can run on the mini. Schiller even took a shot at the Android-powered Nexus, saying the device has “phone applications stretched out, not tablet applications.”

Apple still dominates the overall tablet market, but the lower-priced iPad Mini now makes it a key player in the growing 7-inch segment led by the Kindle Fire and Barnes & Noble’s Nook Tablet.

Apple’s share of worldwide tablet shipments increased to 68% in the second quarter from 63% in the prior quarter, according to research firm IDC. Amazon’s rose to 5% from 3.9%. But the influx of tablets from competitors has gradually reduced Apple’s 84% market share from a year ago.

The new iPad could also end up competing with its larger, more costly predecessor. Piper Jaffray analyst Gene Munster has estimated the Mini could cannibalize 20% of iPad sales. 

Perhaps wary of that possibility, Apple also announced a fourth-generation original iPad just seven months after launching the iPad 3. The latest iPad boasts twice the graphics and image-processing power of the prior model and still provides the same 10 hours of battery life. Apple CEO Tim Cook said 100 million iPads have been sold over the last two-and-a-half years.

Ad executives have expressed high hopes that the iPad mini will become a popular platform in its own right, boosting mobile advertising and marketing efforts. “The way we see it, Apple putting out a smaller tablet will make this screen size a greater consideration point and be a crucial factor in strengthening the movement toward responsive design,” said Rachel Pasqua, VP mobile at iCrossing.

Along with an update to the Author platform today, CEO Tim Cook emphasized the embrace of the iPad as an educational tool in schools nationwide. [Apple] will never actually call the device an e-reader, but it’s clear that chipping away at the e-reader market is a primary objective,” said Pasqua.

Pre-orders for the iPad mini and the fourth-generation iPad start on Friday, Oct. 26 in the U.S. and Europe. 

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