iPad maker expected to broaden portfolio to counter Nexus 7, Kindle Fire threat.
Apple Inc.’s Asian component suppliers have started mass production of a new tablet computer smaller than the current iPad, people with knowledge of the situation said Wednesday, as the Silicon Valley company tries to stay competitive against rivals such as Google Inc. and Amazon.com Inc. that are offering smaller, less expensive alternatives to the iPad.
Two of the people said that the smaller tablet will have a 7.85-inch liquid crystal display with a lower resolution compared with the latest iPad model that came out in March. South Korea’s LG Display Co. and Taiwan’s AU Optronics Corp. last month started mass production of the LCD screens for the new device, they said.
The current iPad’s screen measures 9.7 inches. The size hasn’t changed since the first model was released in 2010.
Apple spokeswomen in the U.S. and Beijing didn’t immediately respond to requests for comment.
Apple’s smaller tablet comes at a time when competition is intensifying in the fast-growing market segment. Since the original iPad was released, competitors have released devices in various sizes, technical specifications and prices. In July, Google, already Apple’s biggest software rival with its Android mobile operating system, launched the Nexus 7, a tablet device with a seven-inch screen that sells for $199. Last month, Amazon unveiled the latest models of its Kindle Fire tablets, with the entry-level model priced at $159. Apple’s newest iPad, released in March, starts at $499.
The Wall Street Journal first reported in February that Apple was testing a smaller tablet. In July, people familiar with the matter told the Journal that Apple’s suppliers were preparing to begin mass production of the smaller tablet in September.
In August, technology blog website AllThingsD reported that Apple was planning to hold a special event in October to unveil the smaller tablet.
Analysts said a smaller tablet could help Apple broaden its product portfolio and stay competitive in the increasingly crowded market. Christine Wang, an analyst at Daiwa Capital Markets in Taipei, said that she expects a smaller Apple tablet to sell at lower prices than the current iPad. It would appeal to those consumers who find the iPad too heavy or too expensive, she said.
“Many people use the iPad to play games and watch videos, but they cannot hold it with one hand,” said Ms. Wang.
Market research firm IHS iSuppli has forecast that global tablet sales will surge 85% this year to 126.6 million units. Last year, the iPad held a dominant share of roughly 60% of the global tablet market.
