Apple has released its new iPad mini two years after founder Steve Jobs said the company would never make a touchscreen that small because it would be difficult to use.
The iPad mini was unveiled at an Apple event in California last night and measures 20cm diagonally, compared to 25cm for the larger version – or about two-thirds the size of the full-size model.
But two years ago Jobs told investors on a conference call that there were "key reasons we think the 10-inch (25cm) screen size is the minimum size requirement to create great tablet apps".
"Apple has done extensive user testing on user interfaces over many years and we really understand this stuff," Jobs said in the October 2010 call.
"There are clear limits of how close you can physically place elements on a touchscreen before users cannot reliably tap, flick or pinch them."
Apple senior vice president Eddy Cue disagreed at the time and tried to convince Jobs the company should look into making smaller product.
Cue said Jobs was starting to come around in an internal email sent in January 2011 that surfaced as part of Apple's patent trial against Samsung this year
The iPad mini sees Apple venturing into the market for smaller tablet computers dominated by Amazon, Google, and Samsung.
The iPad mini will cost $369 in Australia for a 16-gigabyte version and up to $729 for the top-of-the-line 16GB version with Wi-Fi and cellular capability.
Investors had been expecting Apple to price the iPad mini between $240 and $290.
Amazon's Kindle Fire starts at $154 while Google's Nexus 7 starts at $193.
Apple's stock close down 3.26 percent in the US after the launch, prompting critics to suggest the iPad mini had been priced too high.
Analysts at investment bank Mizuho Securities stated in a note that "we believe a price point of US$250-$300 ($244-$292) would have gone a long way in keeping competition at bay".
The iPad mini was unveiled by Apple's senior vice president for marketing Phil Schiller who said: "This isn't just a shrunken down iPad, it is an entirely new design."
The new iPad weighs just 300g and is thinner than a pencil.
It also features rear and front-facing cameras and a 10-hour battery life.
The iPad mini's 20cm screen is still slightly larger than the smallest tablets in the market, at 18cm diagonally.
Schiller said customers can begin pre-ordering the iPad on October 26, and Wi-Fi versions would begin shipping to countries on November 2.
Apple also unveiled a fourth generation of the original iPad and the California-based company said it has sold over 100 million of the devices in two and a half years.
Apple set the tablet computer market ablaze with the first iPad in early 2010 and stuck with its 25cm-screen while rivals introduced lower-price tablets with screens closer to 18cm.
Amazon's 18cm Kindle Fire proved popular last year, and a new version was launched last month.
Meanwhile, a Google Nexus 7 powered by Android software joined the Samsung Galaxy in the 18cm tablet market.