NEW YORK (CNNMoney) -- Apple on Tuesday unveiled a smaller iPad, dubbed the iPad mini, at a highly anticipated event in San Jose, Calif.
The device, which has a 7.9-inch screen, is one-third smaller than than its 10-inch cousin and weighs less than a pound. It's also 23% thinner than the full-sized iPad. The pre-order date is October 26th. The release date is November 2nd. The iPad mini starts at $329.
Apple also unveiled a slightly updated fourth-generation traditional iPad with a new, twice-as-fast processor and U.S. 4G-LTE coverage provided by Sprint, in addition to Verizon and AT&T.
The new iPad comes with the Apple's Lightning connector. Previous versions featured the significantly larger 30-pin connector that Apple has used since 2003.
Apple's current iPad lineup starts at $399 for the year-old iPad 2 and $499 for the fourth-generation iPad.
Shares of Apple were down about 1% during the event.
Since the iPad debuted in 2010, no tablet challenger has come close to unseating it. Apple held a 70% share of the tablet market in the second quarter, according to the latest data from IHS iSuppli.
Amazon's Kindle Fire HD and Google's Nexus 7 both come with seven-inch screens and $199 price tags. Though they haven't threatened the iPad's dominance in the tablet market, they have sold well enough to get Apple's attention.
Apple could potentially stomp out the competition with a lower-cost, smaller tablet of its own. It's an idea the company has toyed with for several years.
Among the many internal documents made public in Apple's patent battle with Samsung was a January 2011 e-mail from Eddy Cue, Apple's head of software and services, in which he told management: "I believe there will be a 7-inch market and we should do one."
Jobs seemed "receptive" to the idea, he said.
That marked a turnaround from Jobs' initial stance. Apple's chief visionary famously trashed seven-inch tablets, calling them so small, they should include sandpaper, "so that the user can sand down their fingers to around one quarter of the present size."
Ahead of the announcement, Wall Street analysts predicted that the iPad mini would keep small tablet competitors at bay. Even if the iPad mini is slightly pricier, industry analysts expect that it will vastly outsell its rivals.
"The iPad mini is the competitions' worst nightmare," said Shaw Wu, analyst at Sterne Agee. "Competitors are already having a tough time competing against the $399 iPad 2 and $499 iPad, and we believe lower price point iPads will make it even more difficult."
The announcement comes ahead of another big tablet launch this week: Microsoft will be releasing its Surface tablet on Oct. 26 -- the first tablet of its own design.
Macintosh: Before showing off the iPad mini, the company also unveiled a new lineup of Macintosh computers, including a 20% thinner and one-pound lighter 13-inch MacBook Pro with a Retina display. The company also updated the $599 Mac Mini.
The most impressive new Mac is the iMac all-in-one computer, which comes with a 45% thinner display and is a remarkable 80% thinner at the edge. That makes the computer eight pounds lighter.
The new iMac has an option for a new "Fusion Drive," which combines flash and hard drive storage for faster reading and writing.
Apple also introduced a new iBooks app for the iPad and iPhone, with continuous scrolling (no more "flipping" through pages), and new sharing options.