Apple using iPad to boost rivalry with Google

Apple's new iPad mini is designed to keep customers from buying low-cost tablets from competitors Microsoft, Amazon and Google.
Apple, the world's most valuable company, unveiled the iPad at an event today in San Jose, California. The device boasts a 7.9-inch screen diagonally, compared with the 9.7-inch screen of the current iPad. It is priced in Australia starting at $369.
Apple CEO Tim Cook is seeking to widen Apple's lead in the tablet market, which NPD DisplaySearch predicts will more than double to $US162 billion in the next five years. By broadening the iPad lineup, Apple aims to add to its 70 per cent share of the market just as Microsoft introduces its own device, called the Surface, and Google and Amazon make upgrades to their own portable computer lines.
Apple has sold more than 100 million iPads since co-founder Steve Jobs introduced the device in January 2010, creating a market among consumers, businesses and schools seeking a gadget that blends features of a laptop with the mobility of a handheld phone. By adding another model at a different price, Apple is mimicking the multigadget strategy it used to make iPod the top- selling media player.
The new iPad comes at a critical time for Apple. Before today, its shares had dropped 9.7 per cent since reaching a record on September 19, two days before the company released the iPhone 5. Supply constraints are making it hard for Apple to keep up with demand for the new device. The shares slipped less than 1 per cent to $US630.74 in New York.
Connected
Apple may sell 5 million to 7 million of the smaller iPads by the end of the year, according to Brian White, an analyst at Topeka Capital Markets.
Aside from price, another advantage for Apple is the connection to the iTunes music store and the App Store, the online bazaar that boasts more than 275,000 tablet-friendly applications.
A smaller iPad also may entice customers who want a computing device that's easier to use on the go, said Sarah Rotman Epps, an analyst at Forrester Research. She estimates that about half of the time people spend with a tablet is in the living room or bedroom.
Wider Appeal
“It could be that a smaller, lighter iPad will be more portable and will appeal to a wider segment of customers,” Epps said in an interview.
A lower price also will undercut a selling point of Amazon, Google and Barnes & Noble, which have tried to win over customers by charging less than the iPad's $US499 starting price, Epps said.
Introducing a smaller iPad is a reversal for Apple. Before his death last year, Jobs had said customers wouldn't like having less screen space.
“This size isn't sufficient to create great tablet apps, in our opinion,” Jobs said in 2010 of 7-inch tablets.
Documents released earlier this year as part of Apple's patent lawsuit against Samsung Electronics Co. included an email from Apple Senior Vice President Eddy Cue discussing efforts to convince Jobs of the need for a smaller tablet.
Apple's introduction of a smaller iPad is one of several events in the coming week as companies look to get new wares on store shelves before the holiday shopping season. Microsoft is introducing its newest Windows operating system on October 26, and Google is due to unveil a new version of its Android software for mobile devices before the end of the month.