By Lorraine Luk
TAIPEI--Apple Inc.'s (AAPL) 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. (034220.SE) and Taiwan's AU Optronics Corp. (2409.TW)
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.
--Ian Sherr in San Francisco contributed to this article.
Write to Lorraine Luk at lorraine.luk@dowjones.com
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