Apple Inc (NASDAQ:AAPL) will host an event on October 23, said a source familiar with the plan, in what is expected to be the unveiling of a smaller iPad to venture into a market staked out well in advance by rivals Amazon.com Inc (NASDAQ:AMZN) and Google Inc (NASDAQ:GOOG).
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Speculation has swirled for months that Apple was planning a smaller, less expensive version of its popular iPad to take on cheaper competing devices, a move that analysts say may hurt its margins but prevent its arch-rivals from dominating an increasingly important computing segment.
The consumer device giant is gearing up to unveil a new product at a major October 23 event, said the source who declined to be named, days before Microsoft Corp (NASDAQ:MSFT) unveils Windows 8 and its new Surface tablet on October 26.
The source did not specify what the product would be. An Apple spokesman declined to comment.
News of the event was earlier reported by tech blog AllThingsD.
The device, which many expect will sport a screen between 7 and 8 inches, is deemed by analysts to be the iPhone makers' attempt to finally get into the fast-growing market.
A smaller iPad will directly compete with e-commerce giant Amazon's Kindle Fire HD tablet and Google's Nexus 7, both of which have 7-inch screens and are priced at $199. The first Kindle Fire, launched last year, went on to grab about a fifth of the U.S. tablet market.
The Nexus 7, manufactured by Asus, has also seen a successful start with the tablet selling out soon after launch.
One Wall Street analyst said he saw the smaller tablet -- dubbed iPad mini by the media -- while visiting component suppliers in Asia.
"We actually had the opportunity to play with a pilot iPad Mini used by one of the vendors," Topeka Capital analyst Brian White said. "This 7.85-inch iPad Mini fit our hands like a glove and we were easily able to tuck the device in our sport coat, offering consumers a more mobile iPad experience for certain use cases."
Apple events are typically among the most-watched items on the industry calendar, monitored by consumers and tech investors alike. The event in two weeks however comes at a time of volatility for the most-held tech counter.
Apple shares were up 0.75 percent at $632.84 in the afternoon, barely recouping significant losses over the past three weeks as investor cashed out after it touched an all-time high of $705.07 on September 21.
While the stock is up 55 percent this year, it is currently down 10 percent from its record high following concerns about disruptions to iPhone supply after a September riot at one of the plants operated by its main contract manufacturer Foxconn Technology, and harsh criticism from consumers and reviewers about a wealth of errors in its crucial Maps service.
NEW SEGMENT FOR APPLE
Apple's s fiscal fourth quarter financial results are scheduled for October 25, two days after the event, offering analysts a rare opportunity to grill executives about their thinking around a new product just after details are unveiled.
A mini version of the iPad marks a departure for the company that now has just one 9.7-inch iPad, though it does come with various storage options and starts at $499.
Late Apple founder Steve Jobs famously derided the 7-inch screen as unwieldy for tablet applications, saying the devices should come with sandpaper so that users can file down their fingers to use them.
But an internal email -- revealed during a recent patent trial against Samsung -- showed Internet chief Eddy Cue arguing that there was a market for a 7-inch tablet and that Apple should have one. The email, sent in early 2011 to top Apple executives, said Jobs had warmed up to the idea of a smaller tablet.
Struggling Silicon Valley technology icon Hewlett Packard (NYSE:HPQ) was among the first to show, albeit unwittingly, that there was indeed a healthy market for cheap tablets. Sales of the TouchPad took off after the company slashed the price to $99 from $399 and $499, after deciding to kill the product.
(Reporting By Poornima Gupta and Jennifer Saba; Editing by Gerald E. McCormick and Marguerita Choy)