The entry wi-fi-only model, with 16GB storage, will cost £269 in the UK and is available from today.
The iPad Mini will compete directly with cheaper similar sized tablets recently launched by Google, Amazon, Samsung and others.
Apple’s vice-president of marketing Phil Schiller told attendees that the device was 23% thinner and 53% lighter than the third-generation iPad, which was released in March this year.
The iPad Mini launch ends years of speculation that Apple was considering launching a new, smaller version of its bestselling iPad range.
In 2010, late founder Steve Jobs described 7in tablets as being “too small”.
However, the company’s apparent change of heart comes in the face of mounting pressure from its closest competitors, who already offer smaller – and crucially, cheaper – products.
In the UK, both Amazon’s new 7in Kindle Fire HD and Google’s Nexus 7 cost £159.
During the presentation, Mr Schiller stressed the importance of being able to hold the device in one hand – a nod to the more travel-friendly appeal of the smaller devices.
In 2010 when the iPad was launched many mocked it as a plaything – but Apple, Google and even Microsoft believe the future of their industry is tablet-shaped.
During the nineties, Apple found itself outpaced in the home computer market by Microsoft and Windows-powered computers – a period of the company’s history it will be conscious to avoid repeating.
The other iPad Mini wi-fi-only models will have a recommended retail price of £349 for 32GB and £429 for 64GB.
The devices supporting 3G and 4G data connections would be released “a couple of weeks” later, the company said. They will be priced at £369 for 16GB, £449 for 32GB and £529 for 64GB.
Apple also announced a lower-key upgrade for the full-sized iPad. Calling it the “fourth generation” iPad, Mr Schiller said its new A6X chip meant it had twice the CPU (central processing unit) power of the third-generation model.