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Reaction to Apple's Reveal of the iPad Mini

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Analysts and investors worry about the iPad mini's price.

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MINYANVILLE ORIGINAL Apple officially announced the iPad mini today in San Jose, California. The iPad mini will have a 7.9-inch display and supports either Wi-Fi only connectivity or both Wi-Fi and LTE wireless connectivity. The basic model has a price tag of $329, and it carries 16GB in storage and has Wi-Fi only access.

Customers can begin pre-ordering the the tablet this Friday, the same date as the Microsoft (NASDAQ:MSFT) Surface RT tablet launch. It will be available starting on November 2.

Reaction to the iPad mini Announcement

A report from IHS iSuppli today (via Mashable) states, "The arrival of the smaller iPad will turbocharge the market for 7-inch tablets, helping the market to approximately double in 2012 and 2013." Specifically, IHS predicts 2013 will see sales increase by 96% from 34 million in 2012 to 67 million tablets.

If tablet providers sell 34 million units globally in 2012, total sales in 2012 will increase by 100% from 17 million in 2011.

However, when the price of tablet was announced, Apple shares dropped, and the company has finished the day down $20.64, or 3.26%, at $613.39 per share.

According to the Wall Street Journal, the $329 price for the basic 16GB version of the tablet caught some investors and analysts by surprise.

Bill Kreher, senior technology analyst at Edward Jones, expected a price of $299. He had hoped that Apple would price it more competitively with Amazon's (NASDAQ:AMZN) Kindle Fire HD tablet and Google's (NASDAQ:GOOG) Nexus 7 tablet.

Abhey Lamba, an analyst at Mizuho Securities, shared similar sentiments, stating, "[T]he $329 price point has left room for competitors to deliver alternatives."

According to Bloomberg, Erik Gordon, a professor at the University of Michigan, said, "At $329, it won't draw people from Kindles and Nooks."

Others are not as concerned about the price, though.
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The author has a position in Microsoft. s in stocks mentioned.
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