Apple introduces eight-inch mini iPad

Apple unveiled a smaller, 7.9-inch iPad boasting all of the features of its larger iteration to the world on Tuesday.

The US tech giant has sold more than 100m of the devices since the iPad's launch in April 2010 and the current range of ten-inch tablets accounts for more than 15 percent of the company’s profits.

Apple will hold a 68 percent share of the market by the end of 2012, compared to 29 percent for rival tablets that run on Android software. This year also sees the launch of Windows 8 which could challenge Apple’s dominance of the market.

Many feel that Apple is coming down the price chain to compete with Amazon’s Kindle and Google's Nexus 7. It is also rivalled by the Samsung Galaxy which is a similar size.

Adam Leach, principal analyst at Ovum, said he expected the smaller iPad to be more competitively priced. "We got a mix of a bit of new Apple and bit of old Apple in the same announcement," he said in an interview "This is new for Apple to be responding to competitors instead of pioneering their own way. It's old Apple as they've gone into this market with a premium pricing strategy”.

The new mini iPad is priced at US$329 for a Wi-Fi only model. Apple CEO Tim Cook and marketing chief Phil Schiller showed off the new tablet. Schiller compared the new iPad with Google's seven-inch Nexus 7 tablet, citing feature-by-feature why the new Apple device was superior. It is unusual for Apple to single out a specific competitor in its product launches. 

“Apple’s device is approximately US$150 more expensive than the Kindle and the Nexus but crucially Apple lack the extra advertising revenue of both Amazon and Google so must rely on hardware sales for their profit” said Destination Wealth Management CEO Michael Yoshikami.

Apple also announced a fourth-generation, full-sized iPad. The latest tablet, which sells for US$499, is faster and slimmer than the current range and comes just days before Microsoft is due to show off its own Surface tablet. Other announcements included a13-inch retina display MacBook Pro.

California-based Apple dominates the tablet market, which it essentially invented.

Steve Jobs, Apple’s late founder, once famously mocked the seven-inch tablet, saying it was too big to compete with smart phones and too small to compete with other tablets, but he reportedly warmed to the concept before his death. The new iPad is likely the first new Apple product that was developed after his death.

Apple shares fell US$20.67, or 3.3 percent, to US$613.36 after the price of the new tablet was announced. Shares in rival tablet makers rose: Barnes & Noble jumped 88 cents, or 6.1 percent, to US$15.32. Shares in Amazon.com, which makes the Kindle, rose 53 cents, or 0.2 percent, to US$234.31.