Apple on Tuesday is expected to pull back the curtain on a "mini" version of its iPad to battle Amazon and Google in the hot, crowded arena of tablet computers with smaller screens, AFP reports.
As is its style, Apple has remained mute regarding what it plans to unveil at the media event, which will be held in the California city of San Jose in the heart of Silicon Valley.
Invitations bore only time and location details along with the message "We've got a little more to show you."
However, rampant rumor fueled by industry insiders foretells the arrival of an "iPad Mini" priced from $249 to $399.
"I don't think they have any choice," said independent analyst Rob Enderle of Enderle Group in Silicon Valley.
"The reality is that the smaller tablets seem to be much more popular because they are lower priced and easy to hold."
Apple set the tablet computer market ablaze with the first iPad in early 2010 and stuck with its 9.7-inch (24.6-centimeter) screen while rivals introduced lower-price tablets with screens closer to seven-inches (18 centimeters).
Amazon's seven-inch 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 seven-inch tablet market.
With Kindle and Nexus tablets starting at $199, Apple will be forced to keep its price low for its new model and "will not have its normal profit margin," said Roger Kay, a consultant and analyst with Endpoint Technologies Associates.
Some blogs say Google may come out with a tablet as low as $99.
"Apple is kind of late to the market with a small tablet," Enderle said.
"This is the first launch of a product that is all Tim Cooks' but it is a very crowded arena with prices hard for Apple to meet."
Cook took over as Apple chief last year in the months before a battle with cancer claimed the life of Steve Jobs, the Cupertino, California-based company's legendary co-founder and leader.
An iPad Mini could wind up cannibalizing sales of larger models while budget-sensitive shoppers opt for competing devices at prices too low for Apple to meet or beat, according to analysts.
Kay said that Apple would be making a "defensive" move with the new device, but that it is unclear whether it will trounce established products from Amazon, Samsung and others.
"Apple wouldn't have gone into this if others hadn't," he said.
"The bar has been set by Amazon. Even though the Kindle is not the same kind of device, it does what it does very well."
Analyst Shaw Wu at Sterne Agee said the iPad Mini "is the competition's worse nightmare" but that sales will depend on how Apple prices the device.
"We do not believe Apple needs to price as low as $199 to match Google's Nexus 7 and Amazon's Kindle Fire HD but believe a price point of $299 or $349 makes sense," he said.
Ben Reitzes at Barclays said the Mini may erode some sales of the larger iPad but will grow the market.
An unconfirmed report out on Monday indicated Apple planned to woo teachers, students and schools with the iPad Mini, fitting it better to tight budgets and winning young devotees to its company's products.
"We believe a smaller iPad could be useful in promoting Apple's agenda in education with e-textbooks," he said.
"Also, the form factor could make more sense for gaming."