Apple unveils iPad mini, adds support for Sprint
Apple (NASDAQ:AAPL) put the rumors to rest and unveiled a smaller, 7.9-inch iPad tablet, dubbed "iPad mini," bowing to the pressure to compete with smaller 7-inch tablets and throwing down the gauntlet to the likes of Google (NASDAQ:GOOG) and Amazon.
Click here for details on the iPad mini
The smaller iPad has a 7.9-inch screen and the same resolution as the iPad 2, with a resolution of 1024 x 768 pixels. The iPad mini will have Apple's dual-core A5 processor, LTE, a FaceTime HD camera and the Lightning dock connector used in the iPhone 5. The iPad mini will start at $329 with Wi-Fi-only connectivity and 16 GB of storage, $429 for 32 GB of storage and $529 for the 64 GB version. The iPad mini with LTE will start at $459 with 16 GB of storage, $559 for the 32 GB version and $659 for the 64 GB model. Pre-orders for the Wi-Fi model will start Friday, and the gadget will be available Nov. 2. Two weeks later the cellular versions will star shipping.
Apple also introduced the fourth-generation, full-size 9.7-inch iPad with a faster processor, the A6X, which Apple said will double processing power and graphics performance. The newest iPad, which comes shortly after Apple unveiled the third-generation iPad in March, also has a Retina Display, LTE and the Lightning connector. This iPad will be offered by Verizon, AT&T and Sprint in the United States.
As had been rumored, Apple expanded the number of LTE bands it is supporting for both the iPad mini and upgraded iPad. The AT&T GSM model will support LTE bands 4 (2100/1700 MHz) and 17 (700 MHz), while the model used by Verizon and Sprint will support LTE bands 1 (2100 MHz), 3 (1800 MHz), 5 (850 MHz) , 13 (700 MHz) and 25 (1900 MHz). The new bands will allow a wider range of LTE carriers to support the gadgets.
Apple CEO Tim Cook said there are now 275,000 iPad apps out of 700,000 total iOS apps, and customers have downloaded 35 billion iOS apps. Apple has paid $6.5 billion to developers. Cook also said 94 percent of Fortune 500 companies are testing or deploying iPads. Additionally, Cook noted that there are now more than 200 million iOS devices running iOS 6.
Apple's decision to pursue a smaller tablet represents an evolution in its strategy. A smaller iPad will compete more directly with Google's Nexus 7 and Amazon's Kindle Fire HD, which have undercut the larger iPad on price. Apple's Phil Schiller, senior vice president of worldwide marketing, said that the iPad mini has a display area that is one-third larger than smaller 7-inch tablets and expands to two-thirds larger during Web browsing.
Currently, the Nexus 7 retails for $199 for the 8 GB model and $249 for the 16 GB version. Amazon's cheapest Kindle Fire HD sells for $199 for the 16 GB model and $249 for the 32 GB model. Both gadgets have 7-inch screens. "Amazon and Google could be the last ones standing against Apple in the tablet market in the coming years based on their ability to offset a loss on the hardware through content sales and advertising revenue, respectively," said Infonetics Research analyst Julien Blin.
Former Apple CEO Steve Jobs was "very receptive" to the idea of a 7-inch iPad even in early 2011, according to evidence submitted during the patent-infringement trial between Apple and Samsung Electronics. Apple executive Eddy Cue, now the company's senior vice president of Internet software and services, said in a January 2011 email to top executives that he had spoken with Jobs in recent months about the idea and that Jobs "seemed very receptive the last time." The disclosure was notable because in October 2010 Jobs lambasted the idea of a 7-inch tablet.
According to research firm IDC, the Kindle Fire represented just 5 percent of the global tablet market in the second quarter, compared to 68 percent for the iPad and 9.6 percent for Samsung Electronics' tablets. Apple has sold 100 million iPads since the device went on sale, including 17 million in its quarter that ended in June (Apple reports its next quarterly earnings Thursday).
Although the iPad mini is more expensive than other small tablets, analysts said Apple is likely to sell millions of them this holiday season. Canalys analyst Chris Jones told Bloomberg he expects Apple to sell at least 10 million iPad minis by the end of the year.
"This isn't the first time many have questioned Apple's premium pricing strategy. We have seen it with the iPhone, iPod, Macs, and even iPad," wrote Sterne Agee analyst Shaw Wu. "We would argue that Apple has a strong track record in pricing to optimize volume and profits unlike most competitors who need to price low to have a fighting chance. We continue to believe iPad mini is the competition's worst nightmare and likely to drive incremental volume."
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