Apple to host October 23 event, iPad mini expected

SAN FRANCISCO - Apple Inc will host an event on October 23 where it is expected to unveil a smaller iPad that will take on the less expensive devices offered by Amazon.com Inc andGoogle Inc.

Apple would launch the mini iPad at the event. The device is expected by many experts to have a screen between 7 and 8 inches.

A smaller iPad will directly compete with e-commerce company Amazon's Kindle Fire HD tablet and Google's Nexus 7. Both devices have 7-inch screens and sell for $199. The first Kindle Fire, launched last year, grabbed about a fifth of the U.S. tablet market.

The consumer device company is gearing up to unveil a new product at a major October 23 event, Microsoft Corp unveils Windows 8 and its new Surface tablet on October 26. The Nexus 7, manufactured by Asustek Computer Inc, has also seen a successful start, with the tablet selling out soon after launch.

Apple events are typically among the most-watched items on the industry calendar, monitored by consumers and technology investors alike. The event in two weeks, however, comes at a time of volatility for the popular technology stock.

Apple shares closed up 0.25 percent at $629.714 on the Nasdaq market, barely recouping significant losses suffered over the past three weeks as investors cashed out after it touched an all-time high of $705.07 on September 21.

A smaller iPad could be a risk to Apple's industry-leading margins, given that neither Amazon nor Google has been known to make much money from the smaller tablets.

Apple earned gross margins of 23 percent to 32 percent on its U.S. iPad sales between October 2010 and the end of March 2012, a court filing by Apple in a recent patent trial against Samsung Electronics Co Ltd revealed in July. The company's margins on U.S. iPhone sales are almost double those of the iPad, averaging between 49 percent and 58 percent.

If the tablet is priced below $299, Apple could still maintain a decent margin if it offers 8 GB of storage instead of the minimum 16 GB storage it has in the current iPad. A mini version of the iPad marks a departure for the company that now has just one 9.7-inch iPad, although it does come with various storage options and starts at $499.

Late Apple founder Steve Jobs famously derided the 7-inch screen as unwieldy for tablet applications, saying the devices should come with sandpaper so that users can file down their fingers to use them.

Struggling Silicon Valley technology icon Hewlett Packard Co was among the first to show, albeit unwittingly, that there was indeed a healthy market for cheap tablets. Sales of the TouchPad took off after the company slashed the price to $99 from $399 and $499 after deciding to kill the product.