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Schiller then introduced a new Mac mini, with a joke: "You knew there'd be something named mini in this presentation." The small desktop computer base will receive stronger Intel processors while keeping the same price. Apple's vice president of marketing then moved to a new iMac, Apple's all-in-one desktop model, which will be 80 percent thinner than its predecessor while also losing the optical drive, but does not have a retina display.

Apple will also introduce a "Fusion Drive" for use with its Mac mini and iMac desktop models, which will combines 128 gigabytes of flash storage and a hard drive with 1 to 3 terabytes of capacity. The new iMac will start at $1,299 for the 21.5-inch model and $1,799 for the 27-inch model.

Cook then returned to the stage for the most-anticipated introduction of the day, the iPad Mini. Once famously derided by Jobs as a loser of a concept, a lower-priced and smaller-screened tablet from Apple gives the Cupertino tech giant a way to protect its flank from rivals Google and Amazon, which are nipping at its heels with their $199 devices.

"This is huge," Akash Agarwal, head of business development for mobility at SAP Mobile in Palo Alto, Calif., said while waiting for the doors to open outside the theater Tuesday morning. "Size really matters from a business perspective, and a smaller iPad will really open up markets for Apple. You'll see these things in kids' backpacks, in purses and at construction sites and fast-food places, where a smaller device makes a lot more sense."

Charlie Quong, a director of product development for Mophie, a Southern California company that makes charging cases for iOS devices, drove up for the show and agreed with Agarwal's thoughts on enterprise uses for the device.

"We'll definitely be making charging cases for the new device, and we expect to see it used in more and more business transactions," he said. "We make a reader that scans bar codes, and we'll see more and more applications like that, and the Mini could capitalize on that trend."

Global Equities analyst Trip Chowdhry was not as kind in his thoughts on the event, saying in an email not long after it ended that "Innovation at Apple is over."

"The best is over for Apple. IPad Mini is playing catch up to Google Android, probably will have a mediocre customer adoption," Chowdhry said.

IHS iSuppli reported Tuesday morning that Apple's introduction of a smaller tablet would nearly double the market for tablets in the 7-inch range both this year and next year. After the Kindle Fire drove sales of smaller tablets to 17 million in 2011, 34 million devices will be sold this year and another 67 million will fly off shelves in 2013, the independent analysis company reported.

"Just as Apple has dominated the market for 9.7-inch tablets with its iPad, iPad 2 and new iPad models, the company is poised to rule the market for 7.x-inch products, driving rapid growth of the segment in 2012 and 2013," IHS researcher Rhoda Alexander said in a news release, adding that demand for the product is especially strong in Asia.

The price of the device was higher than many analysts expected - a consensus guess of $249 circulated on the Web, as analysts believed that price offered buyers a presumably sexy alternative to other similar devices as well as a way to connect with other devices within the Apple integrated ecosystem. The challenge in entering the scaled-down tablet market, said analysts, is to price the iPad's younger, pint-size sibling in such a way that it helps push profits and growth but does not send cost-conscious buyers to less expensive devices like the Kindle and other products.

It's a balancing act for Apple because this competing crop of easy-to-carry mobile devices have been improving dramatically with each new iteration while still selling for break-even prices as little as $159 in the case of the Kindle Fire. The latest iPad, by contrast, starts at $500.

"Our expectation is $299 or lower" for the Mini, analyst Amit Daryanani with RBC Capital Markets told the San Jose Mercury News this week. "The whole point is you want to have it low enough to hopefully leverage the price elasticity. So with a $50 education discount, for example, you could sell it for $249 to students, which is half the price of the iPad."

Apple's last big product launch was the iPhone 5, and the Cupertino, Calif., company sold 5 million of those devices in the first three days of availability, a record for an Apple product launch. Analysts expected even bigger sales numbers, however, and blamed reported production delays by Apple, which helped send the company's stock down 13 percent from the launch date of Sept. 21 through the end of last week.