Apple Unveils iPad Mini

Apple Inc.'s new iPad is small in size but not low in price — and that's got consumers grumbling and Wall Street worried.

By launching a 7.9-inch iPad Mini that is as thin as a pencil and as light as a pad of paper, Apple threw itself into the market for smaller tablets currently ruled by its rivals.

But with a higher-than-expected price for the device, the technology giant may run into difficulty stealing customers away from Amazon.com Inc.'s Kindle Fire HD or Google Inc.'s Nexus 7. The iPad mini starts at $329. Many analysts and consumers had hoped to see a starting price of $250.

Investors appeared to be disappointed, sending Apple's shares down $20.67, or 3.3 percent, to $613.36 on Tuesday after the company announced the new tablet at an invitation-only media event held at the California Theatre in downtown San Jose. Apple's stock has now fallen about 12 percent since it released the iPhone 5 on Sept. 21.

Apple, which in the past had resisted making a smaller iPad, sought to emphasize that the Mini was not inferior to its 9.7-inch device, which was unveiled in 2010 and has since dominated the tablet market.

"It is every inch an iPad," Phil Schiller, Apple's senior vice president of worldwide marketing, told the crowd moments after introducing the long-rumored device.

"The full iPad experience. There's less of it, but no less to it," the company later reiterated.