Apple on Tuesday took the wraps off a slimmer faster tablet called the iPad Air and said it will give away Macintosh operating and work software free to its users, challenging Microsoft Corp's near-stranglehold on personal computing.
Apple announced the surprise offer, which will be available to all users of Apple MacBooks and Mac computers, at a product event on Tuesday at which it also unveiled a new line of Mac notebooks and computers.
Its Mac OS and iWork software suite, which compete with Microsoft's Excel, Word and other applications, will now be offered free to all users.
"We are turning the industry on its ear, but this is not why we're doing it," Apple CEO Cook told media and technology executives at San Francisco's Yerba Buena Center.
"We want our customers to have our latest software."
Apple's iPad Air is about 20 percent thinner than the previous generation of tablets, starting at $499. But the new tablets would face stiff competition, with Microsoft, Nokia and Amazon.com Inc all plugging rival devices in coming months.
Apple, which jumpstarted the tablet computing market in 2010 with the first iPad, has already come under increasing pressure from cheaper devices ranging from Amazon's Kindle Fire to Samsung Electronics Co Ltd's Note.
But while Apple is ceding market share to rivals, its superior library of apps and content should safeguard its lead for years to come, analysts say.
Longer term however, investors hope to see real device innovation from a company that has not unveiled a new breakthrough product in years.
Cook on Tuesday dismissed the competition as directionless.
"Our competition is different: they're confused," he said. "Now they're trying to make PCs into tablets and tablets into PCs. Who knows what they'll do next?"
"We have a very clear direction and a very ambitious goal. We still believe deeply in this category and we're not slowing down on our innovation."