Apple struts iPad Mini, goes premium with $329 price

Also refreshes 9.7-in. iPad, unveils Retina-equipped 13-in. MacBook Pro, raises iMac prices by $100

Apple today unveiled the iPad Mini, a smaller tablet starting at $329 that features a 7.9-in. 1024-x-768-pixel display and can run all existing iPad software without modification.

The company also revamped the 9.7-in iPad, calling it a "fourth-generation" tablet, but like the third iteration it launched just last March, it didn't bother to slap a number in the name.

Tuesday's event was Apple's first invitation-only presentation to be publicly webcast in over two years, and just the third ever.

"I think I can tell from your excitement that you know what this is," said Philip Schiller, Apple's head of marketing, when he first showed the tablet to reporters and analysts today. "This is iPad Mini."

The new tablet is significantly lighter -- at 0.68 pounds, 53% lighter than the refreshed fourth-generation iPad -- and at just 7.2 millimeters, a quarter thinner than the full-sized iPad. Like its bigger brother, the iPad Mini comes in both black and white models, and in both Wi-Fi and Wi-Fi/cellular configurations.

"This isn't just a shrunken down iPad," asserted Schiller, adding that the specifications were equal to or better than 2011's iPad 2, which Apple will continue to sell for $399 and up.

The smaller tablet is powered by an Apple-designed A5 SoC, or "system-on-a-chip," a dual-core that also runs not only the iPad 2 but also last year's iPhone 4S.

It includes both front- and rear-facing cameras -- the latter is a 5 megapixel device -- and features the same 10-hour battery lifespan of its elders. Schiller also made it a point to note that the iPad Mini's screen resolution meant all iPad apps now in the iOS App Store will run on the tablet.

"All the software created for the iPad works on the mini, all with no change," he said.

But it's not as inexpensive as some analysts had predicted, or bloggers had hoped, much less price-competitive with 7-in. tablets from the likes of Google and Amazon.

The iPad Mini starts at $329 for a 16GB Wi-Fi model and climbs to $529 for a 64GB configuration, with a $429 32GB device in between. The 3G/LTE-capable iPad Minis are priced from $459 to $659. The cellular models will be available for AT&T, Sprint and Verizon in the U.S.

Earlier forecasts for the entry-level iPad Mini had been as low as $249, with many more pegging $299 as the likely price. Only in the last week did rumors of a $329 price surface.

"I think it's a little high," said Ezra Gottheil, an analyst with Technology Business Research, in an interview after Apple wrapped up its event. "I was figuring on no more than $299."

Carolina Milanesi of Gartner didn't disagree, but had a slightly different take.

"When Apple created the tablet market, it came in at specifications and pricing that other vendors could not reach, so [those rivals] had to go down in size to 7 inches and go down in price," said Milanesi. "Now, Apple is coming in in that similar form factor [of around 7 inches], but they're the premium offering in that segment. It shows that they're not going to come down in price for more market share. They believe they can still command a premium."

Milanesi argued that in the short run, at least, the $30 difference between the predicted $299 and the actual entry price of $329 "doesn't matter" to consumers.

"If the fact is that for that $30 I get a richer experience and access to all the dedicated apps, I think consumers are discriminating enough to see that difference," Milanesi said. And Apple, starting at a higher price, can always lower it, something much more difficult to do for vendors at the low end that try to raise prices.

"They're going out to get those people who are willing to pay the money," Milanesi said. "When, in six months or whenever, the second generation comes in, then they can cut the price of [this] tablet."

Gartner has estimated that Apple will sell approximately 8 million iPad Mini tablets before the end of the year.

The iPad Mini will ship Nov. 2, starting with the Wi-Fi model, in 34 markets, including the U.S., Canada, France, Germany, Spain and the U.K. The cellular-equipped iPad Mini will ship about two weeks after that, Schiller said.

Apple will begin to take pre-orders for the iPad Mini on Friday, Oct. 26, coincidentally -- or not -- also the launch date for Microsoft's Windows 8 and its first-ever in-house tablet, the Surface RT.

"Apple will sell truckloads of the iPad Mini this holiday season," said Patrick Moorhead, principal analyst at Moor Insights & Strategy, earlier today.

In a later interview, he expanded on that.

"The reason why I think they will still sell so many, even at the higher price of $329, is the allure of having a tablet in that $299 range brings in a completely different class of buyers, people who always wanted an iPad, but didn't want to spend $499 or $599," Moorhead said.

But he wasn't completely happy with the $329. "The natural price point is $299, and it will be $299 over time, but the difference between $299 and $329 lets them cut the price at some point," Moorhead said. "That's why I think what they are doing here is testing the [pricing] waters. But it's going to be a measurement stick of how much money Apple can garner."

For all his betting that the iPad Mini will do well, sell "truckloads," he saw the new tablet as a tougher-than-usual road for Apple. "This is going to be their hardest sell in a long time," Moorhead said.

The Mini was one of two tablet debuts today from Apple: It also introduced what it called the "fourth-generation" iPad, which replaces the "new" iPad, nee "iPad 3" that launched in early March.

The new-new iPad boasts the A6X SoC -- the same one that powers the iPhone 5 -- that Schiller claimed doubled both processor and graphics performance. It also uses the new, smaller Lightning connector that also debuted in the iPhone 5.

Prices for the iPad remained the same, with the Wi-Fi model starting at $499 and the cellular device at $629.

Gottheil was surprised by the quick refresh of the iPad.

"As someone who bought [the iPad 3] just days after its launch, I'm a little disappointed," Gottheil said.

Among other announcements today, Apple launched a refreshed 13-in. MacBook Pro with a Retina screen that starts at $1,699 and tops out at $1,999. Like its bigger 15-in. sibling, which appeared last June, the new notebook ditches the optical drive and packs an SSD (sold-state drive) for storage. The 13-in MacBook Pro ships today.

The company also rolled out a revamped Mac Mini that starts at the older price of $599, with a server-configured model beginning at $999.

Finally, Apple introduced new iMac desktops that are thinner, 80% thinner at the edges, in 21.5-in. and 27-in. models. The all-in-ones come sans an optical drive, the first time the line has dumped them.

Schiller highlighted what he called the "Fusion Drive," which combines 128GB of flash storage with a standard platter-based hard drive. OS X and its bundled applications are stored on the flash drive for better performance, but other often-used applications are automatically shifted by OS X Mountain Lion to the faster flash drive.

The iMacs climbed $100 in price, however, with the smaller desktop now running $1,299, while the larger costs $1,799. The 21.5-in. ships in November; the 27-in. in December 2012.

From all signs, today's roll-out was the last for Apple in 2012. CEO Tim Cook, in fact, took time at the end of the event to summarize the year's launches.

How did Apple do?

"I think this was a good product year for Apple," said Gottheil. "They made some missteps in Maps and the iPhone 5, but overall, it was a solid year, and they executed pretty well."

Milanesi agreed. "It doesn't seem like the refreshes we've seen this year are coming out of any fear of the competition," she said "Their 'foot on the gas' isn't because of pressure, but an evolution of what they do with other devices. They're just building on that."

Gregg Keizer covers Microsoft, security issues, Apple, Web browsers and general technology breaking news for Computerworld. Follow Gregg on Twitter at @gkeizer, on Google+ or subscribe to Gregg's RSS feed. His email address is gkeizer@computerworld.com.

See more by Gregg Keizer on Computerworld.com.

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