Apple's pencil-thin, smaller iPad will cost much more than its competitors.

This signals that the company is not going to get into a mini-tablet price war.

The company debuted the iPad Mini last night, with a screen two-thirds smaller than the full model, and half the weight. Customers can begin ordering the new model on Friday.

In a surprise, Apple also revamped its flagship, full-sized iPad just six months after the launch of the latest model. 

Apple's late founder Steve Jobs once ridiculed a small tablet from a competitor as a "tweener" that was too big and too small to compete with either smartphones or tablets. But now Apple's own Mini enters a growing small-tablet market dominated by's Kindle Fire.

Apple is charging $329 and up for the Mini - a price that fits into the Apple product lineup between the latest iPod Touch ($299) and the iPad 2 ($399). Company watchers had been expecting Apple to price the iPad Mini at $250-$300 to compete with the Kindle Fire, which starts at $159. Barnes & Noble's Nook HD and Google's Nexus 7 both start at $199.

Apple has sold more than 100 million iPads since April 2010 and analysts expect the company to sell 5 million to 10 million iPad minis before the year is out. Apple shares fell 3.3% to $613.36 when the price was announced. Shares of its rivals rose.

Apple said it would start taking orders for the new model on Friday. When pre-orders start on October 26, the iPad Mini will be competing for the attention of gadget shoppers with the release of Windows 8, Microsoft's new operating system.

The screen of the iPad Mini is 7.9 inches (20 centimetres) on the diagonal, making it larger than the 7 inch (17.8 centimetre) screens of the competitors. It also sports two cameras, on the front and on the back, which the competitors do not have.

The iPad mini is as thin as a pencil and weighs 0.68 pound (0.31 kilograms), half as much as the full-size iPad with its 9.7 inch (24.6 centimetre) screen. The screen resolution is 1024 by 768 pixels, the same as the iPad 2 and a quarter of the resolution of the flagship iPad, which starts at $499.

The new model has better apps and is easier to use than competitors like Google's Nexus, analysts said.

Jobs attacked the whole idea of smaller tablets in his last appearance on a conference call with analysts in October 2010. "The reason we wouldn't make a 7-inch tablet isn't because we don't want to hit a price point. It's because we don't think you can make a great tablet with a 7-inch screen," Jobs said. "The 7-inch tablets are tweeners, too big to compete with a smartphone and too small to compete with an iPad."

Job's chief objection was that a smaller screen would make it hard to hit buttons on the screen with the fingers - never mind that Apple's iPhone, with an even smaller screen, was already a hit at the time.

Apple senior vice president Eddy Cue started working on changing Jobs' mind. In an email sent to other Apple managers in January 2011, Cue said the CEO had started warming to the idea of a smaller tablet. The email surfaced as part of Apple's patent trial against Samsung Electronics this year. Jobs died last October.

Company watchers have been expecting the iPad Mini for a year and most of the details, except the price, had leaked out.

Apple also said last night that it is upgrading its full-size iPad, doubling the speed of the processor. Previously, the company has updated the iPad once a year. The fourth-generation iPad will have a better camera and work on more "LTE" wireless data networks around the world.

Apple is also replacing the 30-pin dock connector with the new, smaller "Lightning" connector introduced with the iPhone 5 a month ago.

Apple also introduced a 13 inch (33 centimetre) MacBook Pro laptop with a "Retina" display sporting four times the resolution of the older model. The new model follows a 15 inch (38 centimetre) MacBook Pro with a Retina display introduced this summer, and goes on sale this week for $1,699. The old MacBook Pro will still be sold, starting at $1,199.

The new model dispenses with an optical disc drive and a traditional hard drive. Instead, it uses solid-state "flash" memory. This makes it 20% thinner and lighter than the previous model.