iPad mini is Apple's first foray into small tablets

Apple Inc will begin to sell an 8-inch version of the iPad on Friday to compete with Amazon.com Incs Kindle and other smaller tablets, but it set a higher-than-expected price tag of $329 that Wall Street fears could curb demand.Apple hopes to beat back incursions onto its home turf of consumer electronics hardware, while safeguarding its lead in a larger tablet space - one that even deep-pocketed rivals like Samsung Electronics have found tough to penetrate. Apple Chief Executive Tim Cook and marketing chief Phil Schiller took the wraps off the new tablet, which essentially has most of the functions and features of the full-size iPad but in a smaller package.Priced at $329 for a Wi-Fi only model, the iPad mini is a little costlier than predicted but some analysts see that as a bid to retain premium pricing levels. Others fear the gadget will lure buyers away from Apples $499 flagship 10-inch iPad, while proving ineffective in combating the threat of Amazons $199 Kindle Fire and Googles Nexus 7, both of which are sold at or near cost.Apple has always been a premium hardware manufacturer. Its basically a hardware company and they dont have Google advertising or Amazons online store to fall back on, said Destination Wealth Management CEO Michael Yoshikami. But people are happy to pay a premium because its quality hardware, and the ecosystem (of content and apps) cannot be underestimated.