In a strategic shift, Apple also said that iWork and iLife software suites – for tasks from video editing to mixing music and making business presentations – would be free with all its devices.
“These are really incredibly rich apps, and we have only just scratched the surface of what you can do with them,” Cook said.
“We are turning the industry on its ear; because we want our customers to have our latest software and access to the greatest new features.”
Baker said this was a smart move which can drive sales of hardware along with posing a threat to Microsoft’s empire, which is built on selling operating systems, productivity applications and other software.
Like Google does with its online array of Docs applications, Apple will be making available for free the productivity software that Microsoft sells to users of Windows-powered computers.
“That is Apple’s business model to a T, make software and services free and let them drive sales of the hardware,” Baker said.
“The iWork suite will be a bit of a Trojan horse, like Google Docs is, against Microsoft.”
The new iPads were unveiled on the same day Microsoft began selling an upgraded version of its Surface tablet, and as Nokia unveiled its own tablet computer.
Industry tracker Gartner on Monday forecast that global tablet shipments will reach 184 million units this year — a 53.4 percent rise from last year.
The iPad remains the largest-selling tablet, according to surveys, but its market share is being weakened by rivals using the Google Android operating system.
Apple is also under pressure to adapt to the popularity of premium tablets with high-quality screens in the seven- to eight-inch (18- to 20-centimeter) range where the Mini competes.
Jan Dawson, analyst at the research firm Ovum, said Apple’s latest innovations should “trigger good upgrade sales and get iPad shipments growing again.”
But Apple is also raising the price for the new Mini, unlike competitors, which Dawson said means Apple’s share in tablets will continue to fall as Android’s share rises over the coming years.
Apple shares fell 1.5 percent to end at $519.87 but were regaining lost ground in after-market trades.
