San Francisco - Apple is not acting worried about competition for the iPad.
Even as its rivals introduce tablets at lower prices, Apple chief executive Tim Cook has gone in the opposite direction.
On Tuesday he unveiled a new iPad mini with a high-definition screen starting at $399 (about R3 900), which is $70 more expensive than last year’s model. Apple also introduced a lighter and thinner design for its larger tablet, renamed the iPad Air, starting at $499.
The new iPads follow the debut of the iPhone 5c last month at a heftier price than analysts expected, underscoring how Apple is appealing to the higher end of the market, where more profit is greatest.
It is betting customers see its products as a unique mix of hardware, software and services that are more valuable than lower-cost alternatives.
“You can see from the pricing decision that Apple doesn’t really fear much competition,” said Benedict Evans, an analyst at Enders Analysis, who attended Apple’s launch event in San Francisco.
Apple’s top marketing executive, Phil Schiller, said the company saw the tablet market splitting into two. On one end, Apple was focused on delivering high-quality devices, while the other had lower-quality devices and faced more pricing pressure, he said.
Schiller added that the iPad mini’s increased price was mainly the result of steeper costs for the new high-definition screens. Apple dropped the price of last year’s iPad mini model to $299.
Apple’s new iPads, which will be shipped next month, make their debut in a crowded market. The competition ramps up pressure on Apple because the iPad is its second-largest revenue source after its flagship iPhone.
The success of the new models is critical as the company attempts to reignite revenue growth, which has slowed.
The new iPads, which include more powerful processors and faster wireless speeds, are part of a broad product update ahead of the lucrative holiday shopping season. The company released the new iPhone 5s and 5c last month.
The new iPad Air will roll out in China at the same time as other markets.
Apple also announced that it would start giving away its Mac software. The latest release, called Mavericks, was available for download on Tuesday. Productivity software, including iPhoto and iMovie, is also being made available free.
It is another example of how Apple is disrupting the personal computer business that long dominated the technology industry by having customers pay separately for hardware and software.
And the company showed an updated high-end Mac Pro desktop computer aimed at professions that need extra computing power, as well as new MacBook Pro laptops.
Apple’s challenge with the iPad is similar to what it faces with the iPhone. Rivals are introducing devices based on Google’s Android software that are cheaper. Apple’s share of the tablet market slid to 32 percent in the second quarter, from 60 percent a year earlier.
In addition, more than three years after Steve Jobs unveiled the iPad, the growth of the global tablet market is showing signs of decelerating.
Tablet shipments are projected to increase 28 percent next year to 301 million units, after doubling last year, according to Counterpoint Research.
Cook alluded to the competition, noting “everybody seems to be making a tablet”. Yet he said the iPad was still used four times more than all other tablets put together and Apple had sold more than 170 million.
So far, Apple has not sacrificed its industry-leading profit margins to lower the iPad’s price and gain more customers.
“Apple has never been about market share,” said Carl Howe, an analyst with Yankee Group. “They are content to take the profitable piece of the market.”
Developers at Apple’s event said the updated iPads would attract consumers, especially the lighter, thinner iPad Air.
“When you have a lighter-weight device, you’re going to get more usage,” said Mike McCue, the co-founder of news-reading application Flipboard. “People are more likely to throw it in a backpack, pick it up or use it.”
Apple shares fell less than 1 percent on Tuesday to $519.87 in New York. The stock is down 2.3 percent for the year, compared with a 23 percent increase in the Standard & Poor’s 500 index. In Europe yesterday, Apple had fallen less than 1 percent to the equivalent of $518.77 by 10.20am in Frankfurt. – Bloomberg