Tuesday, October 23 12:30:52
Apple is expected to make its biggest product move today since debuting the iPad two years ago, launching a smaller, cheaper tablet into a market staked out by Amazon.com and Google.
Apple hopes to beat back their charge onto its home turf of consumer electronics hardware, while safeguarding its lead in the larger 10-inch tablet space that even deep-pocketed rivals like Samsung Electronics have found tough to penetrate.
Amazon's Kindle and Google's Nexus 7 have grabbed a chunk of the lower end of the tablet market and proved demand for a pocket-sized slate exists, helping force Apple into a space it has avoided and at times derided, analysts say.
A smaller tablet would mark the first device to be added to Apple's compact portfolio under Chief Executive Tim Cook, who took over from co-founder Steve Jobs just before his death. "Apple sensed early that they had a real winner with the iPad and that has proven to be correct," said Lars Albright, co-founder of mobile advertising startup SessionM and a former Apple ad executive. "They have a large market share, and to protect that market share they have got to be innovative," he said.
Apple's invitation-only event, where it is expected to unveil the tablet, gets underway later today in San Jose.
Wall Street analysts have said for months that Apple was planning a less expensive version of the iPad to take on cheaper competing devices, a move they say might hurt its margins, but prevent its rivals from dominating an increasingly important segment.
The chief rival is Amazon, which proved a 7-inch tablet at around $200 has consumer appeal. The Kindle Fire, released last year for $199, was one of the hottest-selling holiday gadgets. It pressured Amazon's margins but gave it potentially millions of new high-spending customers.
Amazon sold more than a million Kindles a week during December, paving the way for others like Google with its Nexus 7 to try and beat Apple in a market the company created.
The Internet retailer has now put its second-generation Kindle Fire HD in the market, which it says is the "best-selling product across all of Amazon worldwide", based on undisclosed U.S sales figures and international preorders.