SAN JOSE, Calif. (AP) â¿¿ Apple Inc.'s pencil-thin, smaller iPad will cost much more than its competitors, signaling that the company isn't going to get into a mini-tablet price war.
The company unveiled the iPad Mini on Tuesday, with a screen about two-thirds the size of the full model, and half the weight. Customers can begin ordering the new model on Friday. In a surprise, Apple also revamped its flagship, full-sized iPad just six months after the launch of the latest model.
Apple's late founder Steve Jobs once ridiculed a small tablet from a competitor as a "tweener" that was too big and too small to compete with either smartphones or tablets. Now Apple's own Mini enters a growing small-tablet market dominated by Amazon.com Inc.'s Kindle Fire.
Apple is charging $329 and up for the Mini â¿¿ a price that fits into the Apple product lineup between the latest iPod Touch ($299) and the iPad 2 ($399). Company watchers had been expecting Apple to price the iPad Mini at $250 to $300 to compete with the Kindle Fire, which starts at $159. Barnes & Noble Inc.'s Nook HD and Google Inc.'s Nexus 7 both start at $199.
"Apple had an opportunity to step on the throat of Amazon and Google, yet decided to rely on its brand and focus on (profit) margin," said Bill Kreher, an analyst with brokerage Edward Jones.
Apple shares fell $20.67, or 3.3 percent, to close at $613.36 after the price was announced. Shares of Barnes & Noble jumped 88 cents, or 6.1 percent, to $15.32. Shares of Amazon rose 53 cents, or 0.2 percent, to $234.31.
Apple has sold more than 100 million iPads since their debut in April 2010. Analysts expect Apple to sell 5 million to 10 million iPad Minis before the year is out.