Apple May Meet Tablet Competition With a Smaller iPad

The following is an excerpt from an article in 

The New York Times
Monday, July 16, 2012

Apple May Meet Tablet Competition With a Smaller iPad

By NICK WINGFIELD and NICK BILTON

The tech companies are at it again — trying to catch the blockbuster iPad in a race to win the tablet market.

Google on Friday began shipping its Nexus 7, which is smaller and less expensive than Apple’s iPad, and is meant to compete with both that device and Amazon’s Kindle Fire.

This summer, Microsoft announced that it would create its own tablet, Surface. And Amazon is working on a new version of the Kindle Fire, with a larger display, that could compete more directly with the iPad, according to a developer briefed on Amazon’s plans who did not want to be identified talking about unannounced products. Analysts also believe that Amazon is updating the Kindle Fire. Drew Herdener, an Amazon spokesman, declined to comment.

But Apple is hardly about to cede ground.

The company is developing a new tablet with a 7.85-inch screen that is likely to sell for significantly less than the latest $499 iPad, with its 9.7-inch display, according to several people with knowledge of the project who declined to be named discussing confidential plans. The product is expected to be announced this year.

Natalie Kerris, an Apple spokeswoman, declined to comment.

Apple’s plan for a tablet with a smaller screen is part of a textbook business strategy: to lure customers who want different sizes of tablets into the iPad product family, say analysts and technology industry executives.

The strategy would most likely include devices with different prices and functions tailored to various uses, they say. The idea is to help Apple solidify its dominance in the tablet market even as the richest companies in the tech business are trying to figure out how to outflank Apple.