The new iPad mini is displayed after its unveiling at an Apple special event at the historic California Theater on October 23, 2012 in San Jose, California. The iPad mini is Apple's smaller 7.9 inch version of the iPad tablet. (Photo by Kevork Djansezian/Getty Images)
SAN JOSE, Calif. - Welcome to the Tablet Wars.
After selling 100 million iPad tablets since March 2010, and seeing competitors such as Amazon, Google and Barnes & Noble follow with similar but smaller tablets, Apple jumped into the almost pocket-size tablet market Tuesday.
The iPad Mini, as expected, has a slightly larger screen than competitors - 7.9-inch vs. 7-inch for the Kindle Fire and the Google Nexus 7 - and a larger price - $329. Amazon and Google both have $199 versions of the Kindle Fire and Nexus tablets.
"The whole competitive landscape of tablets just got turned upside down," said Gene Munster, an analyst with Piper Jaffray.
Munster predicts the Mini will appeal to more price-sensitive consumers, and forecasts that Apple will sell 5 million by the end of the year.
Apple also introduced a new version of the 9.8-inch standard iPad Tuesday, with a faster processor and improved HD video camera. It replaces the third-generation iPad, which went on sale in the spring, and starts at $499. The new iPads can be pre-ordered starting Friday, and go on sale Nov. 2.
Apple shares fell $20.67 Tuesday to close at $613.36.
Meanwhile, Microsoft will show its answer to the iPad - the Windows Surface tablet - Thursday in New York at the launch party for the Windows 8 operating system upgrade. The $499 tablet-meets-computer runs on Windows 8, and has a 10-inch screen. And on Monday, Google introduces a new Android tablet in New York.
The iPad Mini is slightly larger but wider than other small tablets. At its presentation here, Apple touted that the video and images would look better due to the extra real estate.
While Apple has a commanding 68% market share of tablets, according to tech research firm IDC, it has been losing ground in the corporate market to smaller tablets, says Ted Schadler, an analyst for Forrester Research.
"Apple needed to respond to this consumer and employee demand for smaller tablets," he says.
Introducing smaller versions of its products isn't new for Apple. The company has successfully launched smaller versions of its iPod music player (the Nano and Mini) and computers (the Mac Mini).
On Tuesday, an ultra-thin iMac desktop computer, without a DVD drive, that starts at $1,299, and a 13-inch $1,699 version of the MacBook Pro with ultra-sharp "Retina" display both went on sale.