iPad mini joins tablet turf war

Apple is launching a smaller, cheaper iPad - the iPad mini. It clocks in at 7.9 inches-a screen that's almost two less than the existing iPad and half the weight. All at a starting price of $329.

But analysts say that price, while $70 less than the current iPad, is too high. Apple's stock sold off with fears that its first foray into the smaller tablet market won't be able to compete with rivals Google and Amazon, which sell their tablets in the one to two hundred dollar range.

Maggie Reardon, CNET Networks:

SOUNDBITE: MAGGIE REARDON, SENIOR WRITER, CNET NETWORKS (ENGLISH) SAYING:

"When you're above the $300 price point you're not really comparing apples to apples anymore. And I think if this is a product that people are going to buy for their kids or they're going to get as gifts for people or something you know that they just want to be able to toss in a bag and take on the subway or on a trip, this, I think, is a little too expensive."

The "mini" is apt to appeal to Apple lovers who have been asking for a gadget somewhere in size between an iPad and an iPod Touch or to those who are willing to pay up for the "mini's" flashier design and more expensive materials.

But if Apple cannot successfully upsell the "mini", Ryan Block of gdgt.com, says pricing may change.

SOUNDBITE: RYAN BLOCK, CO-FOUNDER, GDGT.COM (ENGLISH) SAYING:

"I wouldn't be too surprised if the iPad mini undergoes a price drop at some point in the next year to year and a half."

Another market where the "mini" may make inroads is education.

SOUNDBITE: RYAN BLOCK, CO-FOUNDER, GDGT.COM (ENGLISH) SAYING:

"With the new version of iBooks that they released today you'll be able to update your textbooks over the air the same way you update an app and I think that that's just an amazing move forward for the digital textbook market."

Apple also announced upgraded MacBook computers and a next generation iPad 4 that took some by surprise after it released a new iPad only six months ago.

The "mini" comes just in time for the holiday shopping season with Apple taking orders starting Friday. The months ahead will tell whether the tablet goliath is able to compete in this smaller, growing market.