After taking medical leave in January, Steve Jobs, chief executive officer of Apple Inc, makes a public appearance to introduce the iPad 2 at an event in San Francisco, California, on Wednesday (Thursday, Beijing time). [Photo / Bloomberg]

BEIJING - When Apple Inc's Chief Executive Officer Steven Jobs showed up with his new iPad 2 in the United States on Wednesday (Thursday, Beijing time), it not only brought cheers from Apple fans and stockholders but also sent a chill through many companies on the other side of the Pacific Ocean.

On the same day of the iPad 2 launch, Apple decided to reduce the price of the first-generation iPad by 1,000 yuan ($152) in the Chinese market - from the original price of 3,888 yuan. Both multinational and local companies have been cornered in the Chinese market because of the impending increase in competition caused by Apple's decision.

"Compared with news of the new iPad 2, the price decrease of the first-generation iPad is more sensational to Chinese consumers, as it will squeeze out more competitors from the market," said Wang Jiping, research manager at International Data Corporation (IDC) China, an IT research company.

"We estimate that 2.5 million units of tablet PCs will be sold through official channels in China this year, which is double the number in 2010," said Wang.

He pointed out that Apple will use the new iPad 2 to compete in the high-end market, and dominate the low-end market by slashing the price of the original iPad.

More than 70 brands, including big companies such as Lenovo Group, Dell Inc, Hewlett-Packard Corp and Samsung Group, are competing for the Chinese market.

Lenovo's LePad can be purchased for around 3,500 yuan, which was 300 yuan lower than the first-generation iPad. But now that the price advantage has been reversed, "there is little profit margin left at such a low price", said Wang.

Other tablet PCs, also priced between 3,000 to 4,000 yuan, will no longer be very attractive to Chinese customers after the price reduction for the iPad, he said.

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"I will definitely buy an iPad 1 rather than pay more for another brand," said Zhang Lin, a university student in Beijing. "I did not buy it previously because of the price, but since I don't need too many functions, I prefer the first generation to the iPad 2."

According to IDC, Chinese consumers had purchased at least 800,000 iPads by the end of 2010. Since there are only a few Apple stores in the country, most of them were bought through other channels. In 2011, the sales volume for all tablet PCs, including iPads, will hit 4.5 million units in China.

Jobs said in the news conference that the company will launch the iPad 2 on March 11 in the United States, followed by other markets. However, Jobs did not comment on when the new tablet PC will be released in China.

The first-generation iPad came on the Chinese market in September after a nine-month delay and faced a heavy shortage for the first few months.

At the time, customers felt disappointed about being unable to get an iPad through official channels. As a result, gray-market vendors and scalpers saw an opportunity and were more than happy to fill the gap.

In China, going to a gray-market dealer is still usually the most convenient way to buy an iPad.

The same is expected to happen after the launch of iPad 2. Some vendors at Zhongguancun, the largest electronics market in Beijing, said they can help customers order the iPad 2 from the US for a minimum price of 6,000 yuan, about 2,000 yuan higher than the official price in the US.

According to Apple's news release, the iPad 2 is 33 percent thinner and up to 15 percent lighter than the original version while maintaining the same 24.6-centimeter touch screen and up to 10 hours of battery life. The iPad 2 features an updated processor, Apple's dual-core A5, and includes front and rear cameras.