Secretive X-37B space plane returns to Earth, two years on

The Air Force says that the almost one-of-a-kind spacecraft "conducted on-orbit experiments" in the the longest-ever mission for the X-37B program.

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Back after 674 days in space, the X-37B space plane meets up with recovery crew members. Boeing

The intriguingly long voyage of the unmanned X-37B has come to a conclusion at last. But the mystery of the mission lingers on.

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The X-37B space plane and NASA's space shuttles have common roots, and it shows. (File photo) Boeing

The US Air Force space plane, one of just two X-37B vehicles in the Pentagon's inventory, landed Friday morning under the auspices of the 30th Space Wing at Vandenberg Air Force Base in California after 674 days in space -- that is, 22 months.

And that's about all that the space plane's handlers would say about the mission, aside from the terse statement that it "conducted on-orbit experiments."

"The mission is our longest to date and we're pleased with the incremental progress we've seen in our testing of the reusable space plane," the Air Force said in a statement.

The Air Force also said it plans to start the next X-37B mission sometime in 2015, launching from Cape Canaveral in Florida.

Almost as remarkable as the length and the hush-hush nature of the mission is one of the signature skills of the Boeing-built X-37B -- the unmanned spacecraft flies autonomously on its return trip to Earth.

The Air Force has said precious little -- ever -- about its X-37B missions, leading to wide-ranging speculation about what the diminutive space vehicle has been up to up there, or is building toward. Theories hit on everything from terrestrial surveillance to satellite launches (or, conversely, satellite killing) to weapons platform aimed at ground targets.

Or it could be more mundane: these could simply be shakedown cruises to see how a space plane, one with no human aboard, fares on extended junkets into orbit and back. It can't be easy to work all the kinks out of the algorithms that enable a space plane to maneuver in orbit, and in re-entry and landing, without a human at the controls.

The boilerplate description on the Air Force's fact sheet is not exactly illuminating: "The primary objectives of the X-37B are twofold: reusable spacecraft technologies for America's future in space and operating experiments which can be returned to, and examined, on Earth."

Measuring 29 feet long, with a wingspan of less than 15 feet and a cargo bay equivalent to that of a pickup truck, the 11,000-pound X-37B looks like a junior version of NASA's space shuttles. That's not really a coincidence, since both trace their roots to the space agency's research into lifting-body flying machines. In fact, the X-37B program was a NASA project until 2004, before it was shifted first to the Defense Advanced Research Projects Agency and then on to the Air Force.

This was the third spaceflight of an X-37B, also known as the Orbital Test Vehicle, since missions began five years ago. The first, which ended in December 2010, lasted 224 days, and the second, which ended in June 2012, endured for 469 days, or a year and four months.

This latest mission began December 11, 2012, when an Atlas V rocket carrying the space plane lifted off from the Cape Canaveral Air Force Station in Florida.

There are two OTV craft in the X-37B fleet. The one that flew on the just-ended mission is OTV-1, which also carried out the first of the flights to date. Confusingly the numbers in the the OT-x designations seem to be used loosely both for the spacecraft (-1 and -2) and for the missions (-1, -2, and now -3).

NASA last week said it has entered into an agreement with the Air Force's X-37B program for use of the Kennedy Space Center's Orbiter Processing Facility (OPF) Bays 1 and 2 -- former space shuttle hangars -- to process the X-37B for launch. Boeing is performing construction upgrades in those facilities that are targeted to be complete in December.

But the flights of the X-37B -- however many eventually take place -- could just be the groundwork for the next generation of space plane.

In July, DARPA took a first step back into the game, announcing the start of design work toward the XS-1, which also would be a reusable unmanned vehicle for "aircraft-like access to space." The agency didn't mind mentioning potential payloads: "XS-1 seeks to deploy small satellites faster and more affordably, and develop technology for next-generation hypersonic vehicles."

It's probably not too much of a surprise that Boeing is in the mix, winning a $4 million preliminary design contract for its concept of the XS-1. (Teamed with Boeing is Blue Origin, the spacecraft-minded company owned by Amazon CEO Jeff Bezos.) The other two Phase 1 contracts went to Northrop Grumman (working with Virgin Galactic) and to Masten Space Systems (working with XCOR Aerospace).

Late on Friday, Boeing declared its own cheery but unrevealing sentiments ("the X-37B program performs risk reduction, experimentation and concept of operations development for reusable space vehicle technologies") about the return of the X-37B.

"We congratulate the Air Force Rapid Capabilities Office and the 30th Space Wing at Vandenberg Air Force Base on this third successful OTV mission," said Ken Torok, Boeing director of Experimental Systems. "With a program total of 1,367 days on orbit over three missions, these agile and powerful small space vehicles have completed more days on orbit than all 135 Space Shuttle missions combined, which total 1,334 days."

Update October 18 at 7:38 a.m. PT: Added photos, along with comment from Boeing.

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Post-spaceflight cleanup and inspection of the X-37B begins. Boeing

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The X-37B landed at Vandenberg Air Force Base at 9:24 a.m. October 17, 2014. Boeing

About the author

Jonathan Skillings is managing editor of CNET News, based in the Boston bureau. He's been with CNET since 2000, after a decade in tech journalism at the IDG News Service, PC Week, and an AS/400 magazine. He's also been a soldier and a schoolteacher, and will always be a die-hard fan of jazz, the brassier the better.

 

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Let's play a game. Who can think of the craziest, yet possible explanation for this shuttle? I'll go first:

A focused, space-to-ground radiation weapon for slowly exposing high-value targets to deadly radiation. Need a low-profile way of taking out a foreign ruler? Expose him to small amounts of radiation from this shuttle's ray gun once a day for several weeks as he grabs his morning paper. He/she will eventually develop cancer and die without knowing why and without causing any collateral damage in the process. The ultimate stealth assassination. Who needs the destructive force of Goldeneye when we've got X-37B!? Muhahahahaha!!! (Yes, I've been watching a little too much James Bond recently.)

Where is Snowden...?

USA is excessively focused on the macro wars of the early first half of the 1900's up to about 1960's


The real thereat now comes from niche type enemies that the USA finds hard to fence with.

eg viet cong,red brigade ,eta,IRA  type  insurgent group & suicide bombers. These are the new style killers.

The big targets of old do not present themselves these days, simply because they are too easy to take out from a distance

Guerilla warfare & obfuscation is what the USA need to focus on these days.

Somehow it just doesn't look all that modern on the outside with those familiar space shuttle tiles... though I know the electronics are more than state of the art! Wonder how well it can maneuver around, but they must have to be very economical with the gas over 2 years!

@TariqHossenbux How should it look? The things that work well they just work. How much it can maneuver is classified but once in orbit it takes very little to maintain.

@TariqHossenbux 

Indeed. Lifting bodies have to be a certain shape to work. Re-entry vehicles must have thermal shielding to survive. The shielding must be very light to maximize payload mass. Reusable vehicles must have a heat shield that is maintainable, hence the replaceable tiles. One-use heat shields, such as those used by capsules, can be designed to ablate away. One effective, and cheap, material for that is balsa wood. But that becomes very labor intensive to replace after each flight for reusable vehicles with more complex shapes like a lifting body. So they use the proven ceramic tiles, most of which can be reused again and again, but if one fails inspection it can easily be replaced.

They launch using an Atlas V booster to get the craft into orbit. It contains the necessary fuel (a lot of fuel) to reach orbit. Once in orbit, they don't need any active propulsion at all, unless they want to change orbits. If this confuses you, think of Earth's Moon. It uses no fuel at all as it orbits the Earth. The OTVs have been observed to change orbits, so they certainly must contain maneuvering fuel. Based on the hazmat suits the ground crew are wearing in the photos, that's almost certainly hydrazine. Most satellites use that for station-keeping. The craft also needs some fuel to come out of orbit and re-enter the atmosphere. For a vehicle that size, it likely carries three or four hundred pounds of fuel, about the same mass of fuel as my pickup truck carries. Like the OTV, my pickup truck can remain parked for long periods without using any fuel at all, but when it wants to go somewhere else it has to burn fuel.

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Apple's iOS 8.1 hits Monday with Apple Pay, iCloud photo library

The update, which became available for download Monday, adds support for Apple Pay, brings back the camera roll and launches the iCloud photo library.

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Craig Federighi, head of Apple's software operations, introduces iOS 8.1 during last week's event. Screenshot by Nate Ralph/CNET

The latest update to Apple's mobile operating system has hit the market.

iOS 8.1, which Apple unveiled at its iPad and Mac event on Thursday, brings back "the beloved camera roll," as Apple software head Craig Federighi described it, and marks the debut of the iCloud photo library. It also adds support for Apple Pay, a new service that allows owners of Apple's latest devices to purchase items in stores and online using the touch of a finger on the gadget's Touch ID. And the update enables iPhone users to send and receive text messages from their iPads and Macs.

The OS update became available for download around 10 a.m. PT Monday.

Apple's iOS 8 is the company's second major release of a mobile operating system under the guidance of Federighi and head designer Jony Ive. Apple released iOS 7 last year with an updated typography, color schemes and a flatter design concept, as well as a new control center.

While not as grand an overhaul as iOS 7, iOS 8 still offers a bevy of new features with more of a focus on functionality than visuals. Besides new software that tackles long-standing issues with iOS' notification system, iOS 8 also has tie-ins with Apple's desktop OS X software, iCloud and native SMS client Messages.

It didn't take long for some iOS users to start reporting problems after Apple introduced iOS 8 on September 17. Conversations on Apple's support forums and other online source pointed to Wi-Fi connectivity glitches, the usual battery drain issues and slow performance in Safari, among other problems. A bug in the operating system also prevented developers from launching HealthKit apps in the App Store.

The iOS 8.0.1 update, released September 24 and then swiftly recalled, aimed to fix those issues. But many users immediately reported problems after downloading the update, including their iPhones no longer connecting to a cellular network. iPhone owners also pointed to issues with Touch ID after downloading the update, with some noting that the feature -- which allows people to unlock their phones using their fingerprints -- was no longer working.

Apple ended up pulling iOS 8.0.1 about an hour after it first became available. The company later published instructions for users who downloaded iOS 8.0.1 before Apple scrapped the update. The steps helped users downgrade their devices to iOS 8 as Apple worked on a fix for the software. The company released iOS 8.0.2 on September 25.

Adoption of the iOS 8 has been sluggish. As of October 5, Apple's App Store Distribution page showed adoption of iOS 8 at 47 percent. That's a mere one point bump from the 46 percent seen on September 21 and much slower than the adoption rate of iOS7, which was 69.7 percent 20 days after launch.

But Federighi gave iOS adoption a more positive spin Thursday. "In just under four weeks, 48 percent of iOS users are on iOS 8," he told the crowd, noting "the vast majority" of Android users are running an OS that's more than two years old. "After 313 days, KitKat is only on 25 percent of Android devices."

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iOS 8.1 adds Apple Pay and many other features. Screenshot by Shara Tibken/CNET

For Apple, it's key to get users to adopt its newest software so they take advantage of new features and services. The company's software has been an important differentiator from other mobile devices. iOS 8 added much-desired functionality such as iCloud improvements and third-party app notifications. But the bugs and other problems have likely caused customers to wait to download the software.

When Apple launched iOS 8 last month, it got rid of camera roll -- and greatly frustrated users. Camera roll was a folder on the iPhone that housed all of the photos users snapped with their phone. With iOS 8, instead of going to camera roll, photos instead went to a folder titled "recently added." This folder also holds every photo taken and deleted by a user in the last 30 days -- meaning that users cannot fully delete their photos. Now, with the return of camera roll, users should be able to both separate and delete their photos again.

The iCloud photo library will be available in public beta with iOS 8.1 and will tap into users' iCloud storage. The feature will let users make edits to photos and videos on any of their devices -- smartphone, tablet or computer -- and those changes will be instantly reflected on all of their devices. The first 5GB of storage will be free and then it's 99 cents a month for 20GB, and $3.99 for 200GB; higher tiers are available, up to 1TB.

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Along with the launch of the iPhone 6 and iPhone 6 Plus smartphones last month, Apple also unveiled its new mobile payments system, called Apple Pay. The service, which launches Monday with iOS 8.1, lets people purchase goods simply by tapping their iPhones to payment terminals and then touching their devices' fingerprint sensors. Both the devices and the terminals must have near-field communication (NFC) chips that store payment credentials -- something that limits the in-store service to the new iPhone 6 and 6 Plus phones, as well as the Apple Watch when it hits the market next year.

But Apple Pay has another component that doesn't require an NFC chip but does need the company's Touch ID. People now can pay for items in apps using a single touch on their device's fingerprint sensor, something that removes time and the hassle of entering credit card and address information over and over. Previously, Apple allowed consumers to use the fingerprint sensor to quickly buy content just from its iTunes, App and iBooks stores. Online shopping within apps works with Apple's new iPhones and watch, as well as the new iPad Air 2 and iPad Mini 3.

 

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​Why it's harder to choose which iPad works best for you

Apple's tablet lineup has expanded from six configurations to more than 50 in four years. Has the product lineup become too complex?

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The iPad Air 2 and the iPad Mini 3 are Apple's latest tablets, but join an existing family of devices that the company plans to continue selling at discounted prices. James Martin/CNET

Apple has never sold so many different types of iPad tablets all at the same time.

After the debut of the iPad Air 2 and the iPad Mini 3 last week, Apple now sells five different models, allowing for 56 configurations with prices from $249 to $829. With so many choices, the iPad lineup is starting to look less and less like the "simple and elegant" design mantra Apple uses to describe its products.

It's hard to say definitively yet whether having so many options will confuse consumers or, worse, if it's evidence of a defensive Apple reacting to competitors and a sputtering tablet market. Critics who think Apple isn't the trailblazing company it once was question whether CEO TIm Cook's leadership is steering the gadget maker toward a more confusing and less profitable array of products. Having that many choices isn't a product philosophy espoused by Apple co-founder Steve Jobs, who unveiled the iPad in 2010 and handed over the reins of the company to Cook in 2011.

"It's really the difference between Cook and Jobs," said Rob Enderle, an analyst at the Enderle Group. "Jobs created a very unique model. His idea was to create a simple line and drive people to it."

If you walked into an Apple store four years ago, when the tablet market had yet to come into its own, the consumer choice was in line with that Jobsian vision. Potential iPad buyers only had to consider a few questions: how much storage (16, 32 or 64 gigabytes), and whether the tablet would to work solely on Wi-Fi networks or have cellular connectivity. As the iPad won over fans (the company sold 225 million units since its debut), the tablet market matured and competitors flooded the market with their own devices.

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Apple's full iPad lineup is now more complex than ever, offering five different models at the same time. Screenshot by Nick Statt/CNET

Apple began to offer more choices to lure consumers who didn't think a higher-end, 9.7-inch model was the perfect fit -- the same strategy it employed to win over a mass market audience for its iPod digital media player and is now doing with the iPhone.

For the iPad, the expansion of the product line meant not just a smaller tablet -- the 7.9-inch iPad Mini, which debuted in October 2012 -- but a reinvention of the 9.7-inch model with last year's pencil-thin iPad Air. Almost every time a new model was announced, Apple discontinued an older product to streamline consumer choice. The iPad 2 replaced the first generation model, the iPad 3 was quickly replaced by the fourth iteration, and the iPad 4 was replaced by the iPad Air.

Yet now, Apple is keeping both the first- and second-generation iPad Mini available alongside the first iPad Air. The iPad Mini 3, which got only only 40 seconds of stage time from Apple marketing VP Phil Schiller at Thursday's product launch, is only slightly different from its older sibling: it adds more storage and the Touch ID fingerprint sensor in the home key. That Apple kept the iPad Mini 2 on board at a reduced price of $299 already has reviewers advising consumers to steer clear of the Mini 3 and opt for the cheaper Mini 2, a rarity for a company known for driving consumers upward and commanding premium prices for the best hardware.

So what's the deal? Analysts say it may be a sign that Samsung, Apple's chief rival in the market for tablets and smartphones, is winning away more customers with the many models it sells across numerous product lines at different prices.

"Tim Cook is trying to compete with Samsung," Enderle said. "The customer instead of having a clear choice has a hard choice."

That choice manifests itself in consumer doubt around how to avoid making a buying mistake like buying the 16GB iPad Mini 3 when you actually wanted the 64GB iPad Mini 2. "They have so many obsolete products in the market right now that it's pretty damn hard for the consumer," Enderle said. "Therein lies the difficulty for Apple longterm."

Apple did not respond to a request comment.

The role of cheaper iPads

There are other factors at play, too. Tablets aren't sold at a reduced or subsidized price by wireless carriers. That's driven consumers to hold on to them longer because there aren't cellular carrier subsidies driving you to upgrade every two years (or less). Apple has built its smartphone business by urging consumers to get the best and latest iPhone. But it can't mirror that strategy easily with the iPad.

Much of that has to do with the maturing of the tablet market.

Though Apple has sold 225 million iPads since the device's introduction in 2010 and has more than 675,000 dedicated apps for the gadget, the company's tablet share has dropped from 33 percent to 27 percent in the second quarter of 2014, according to market researcher IDC. The iPad is still Apple's second-best selling product line behind the iPhone at about 15 percent to 20 percent of revenue (the iPhone accounts for more than half of revenue).

Yet while the tablet market is expected to continue growing, with consumers expected to buy as many as 229 million units this year, its growth is estimated to have slowed from a substantial 55 percent increase last year to as little as 11 percent in 2014, according to a forecast in a report from research firm Gartner this month.

Given that competing devices from companies including Samsung, Google and Amazon sell at prices below the iPad, Apple is wading into tricky waters. Google's newest tablet, the Nexus 9, is a quality device that stacks up well against the iPad Air 2, but is priced like an iPad Air at $399.

There's also the effect it may have on the brand. "I think it's a bad ideas to sell old products as current. It degrades the brand," Enderle said.

But that may be where having a wide array of choices comes in strategically, says Rhoda Alexander, director of tablet and monitor research at IHS Technology.

"What happens is that Apple starts the customer out on a choice selection of the product that's affordable," she said. That range is now as low as $249 for a 16 GB first-generation iPad Mini, a 2-year-old device that lacks the frills of its newer siblings.

In other words, Apple's strategy may be to get consumers into stores with lower-priced models -- and rethinking how much money they're willing to spend when they see what a little more cash can buy them in terms of features. "When you want to move up...to the 64 GB model or to have the gold casing, you think, 'Now that I'm here, do I want this product or the 9.7-inch Air?' Because they're the same price," Alexander said.

In that sense, Alexander says, "it's all carefully calibrated to move the customer up the decision tree." So even though a tablet may be something you shop for only once every few years, getting more consumers to want that tablet in the first place -- using the $249 iPad Mini for instance -- gets them thinking about how much bang for their buck they can get once they begin considering, say, the iPad Air 2 for only $500.

Are five iPads too much?

There is still the possibility that consumers may look at Apple's charts and come away scratching their heads. "There's the risk of that, particularly for someone who is just coming into the product line," Alexander said.

However, Apple has played this game before with the iPod. The original iPod, with 5GB of storage, was the one and only device in 2001. By 2009, Apple had moved through multiple iterations of every iPod model it unveiled -- delivering the Shuffle, Mini, Classic and Touch -- changing up the designs and adding colors. The experimentation paid off and the iPod became the dominant digital media player in the world.

With the iPod, each model played a unique role that consumers could identify -- the iPod Shuffle for exercising, the Touch for game players who don't listen to a lot of music, the Classic for iTunes junkies. With the iPhone now too, consumers are given an obvious choice between big and bigger screen sizes.

The differentiation for iPads isn't quite as obvious -- the smaller iPad Mini can be held more easily in one hand and can fit more comfortably in a purse or backpack. But consumers will still be using them in very much the same way, with the same apps in the same tablet environment that tends to be when we're at home connected to Wi-Fi. That poses a problem when you cannot easily pinpoint which tasks the Mini or the Air are better for. Alexander says that Apple will have to offer clarity there, but that its in-person stores are designed to tackle those kinds of consumer questions.

"You're looking at a system in a mature market that has a lot of retail stores that help walk people through the decision process," she said.

Having 56 iPad configurations isn't as messy as it sounds when you consider the things consumers most care about -- color, storage amount, and display -- are easily communicated. "The product line is maturing. There's more to offer," Alexander added. "There's not necessarily a reason to discontinue old products."

About the author

Nick Statt is a staff writer for CNET. He previously wrote for ReadWrite and was a news associate at the social magazine app Flipboard. He spends a questionable amount of his free time contemplating his relationship with video games while continuously exploring the convergence of tech, science and pop culture.

 

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Apple has big ambitions for tablet sales with iPad Mini

Apple is counting on the $249 iPad Mini to draw you into its stores. But it's hoping you end up buying a $499 iPad Air instead.

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Phil Schiller, Apple's head of marketing, briefly talked about the iPad Mini 3 on Thursday. Screenshot by CNET

Apple usually looks to its next new thing to drive sales. In the case of the iPad, it's counting on the 2-year-old iPad Mini, now selling for just $249, to draw you into its stores -- and convince you to buy a more expensive iPad instead.

The Cupertino, Calif.-based consumer-electronics giant unveiled on Thursday new designs of its tablets -- the iPad Air 2 and the iPad Mini 3. But the company also said it would continue to sell its first iPad Mini for $50 less than before. The 7.9-inch device, introduced in late 2012, now becomes the cheapest tablet Apple has ever offered, at $249 with 16 gigabytes of storage. The 9.7-inch iPad Air 2 starts at $499 for the same amount of storage, while the iPad Mini 3, the latest design in the 7.9-inch line, is $399.

Apple has never been the low-cost player. Its devices, from the iPhone to the iMac desktop computer, carry premium price tags. And the company has long vowed to remain that way, putting its focus on protecting profitability rather than expanding its market share. But Apple is facing sales slowdowns in the tablet market that have caused it to expand its iPad line by offering an older product at a lower price.

Apple still may not be the "value" provider, but it's sure getting closer.

"For somebody that is looking for something very affordable, there's something," Apple CEO Tim Cook told CNET News after Thursday's product debut in Cupertino. "For somebody who's going to spend a bit more, you can get an iMac with a beautiful Retina display [for $2,500]."

For the past several years, Apple kept its year-old mobile devices on the market and sold them for about $100 less than the newer versions. The iPad Air, released a year ago, now starts at $399, for instance. The iPhone 5S,released in 2013, starts at $99 while this year's iPhone 6 is priced starting at $199.

Apple continued selling the iPad 2 for three years after it was unveiled in March 2011. But keeping the original iPad Mini is the first time Apple has offered five different iPad variants in its lineup instead of four.

Apple jumping into the low-cost battle

Apple's iPads remain the world's best-selling tablets, but people just aren't buying as many tablets anymore. Large-screen smartphones -- including the 4.7-inch iPhone 6 and 5.5-inch iPhone 6 Plus -- are eating away at the need for a tablet. And the iPad's design hasn't radically changed since former Apple CEO Steve Jobs introduced the device in 2010.

Unlike smartphones, which get replaced every two years or less, consumers are happy holding on to their iPads for much longer or passing their older devices to family members.

As if that weren't enough, almost everyone who wants a tablet in mature markets such as North America already has one. Kantar Worldpanel, which conducted a survey of 20,000 consumers in the US, found that only 3 percent of non-tablet owners said they definitely plan to buy a tablet in the next 12 months. Another 10 percent said they would probably buy one. But 43 percent said no.

And many people seeking out new tablets are opting for cheaper ones, such as Amazon's $200 devices and similarly priced Google Android devices.

Apple's solution? Drop the price of the Mini to get more people interested. It may be easier to talk yourself into spending $250 on a tablet than $300 or $500. That's part of the reason Amazon's Kindle Fire tablets, initially priced at $199, were popular when they hit the market. Apple can now get people in the door with its $249 iPad Mini, but analysts expect that many people will consider dropping $50 or $100 more for a better iPad.

"There is a psychology in how the consumer moves up that staircase," IHS analyst Rhoda Alexander said. "'If I'm going to get this, why don't I get this?' As long as you have enough steps there, you have a much more complete series line."

Apple saw the same thing happen when it introduced the iPhone 5S and iPhone 5C last year. The iPhone 5S, with high-end specs and a TouchID fingerprint sensor, started at $199, while the 5C -- essentially 2012's iPhone 5 in a colorful, plastic casing -- was priced $100 less. Unfortunately, few people actually bought the 5C, Cook admitted during Apple's earnings call in January. At the time, he attributed that to people being interested in TouchID and other features unique to the 5S.

Consumers looking for better iPad features undoubtedly will have to shell out for pricier devices. The original iPad Mini is the only tablet in Apple's current mobile lineup that doesn't have a high-definition Retina display. And if consumers want to use services such as Apple Pay, they'll need to pony up for the latest iPad Air 2 or the iPad Mini 3, the only tablets that support the new payment technology.

The $249 price-point also may appeal to people in developing markets, but many in places such as China typically aren't happy buying outdated devices. If they're buying a smartphone or tablet, they want the newest products available.

35 seconds on the iPad Mini 3

The iPad Mini 3 seemed little more than a footnote at Thursday's product launch. Phil Schiller, Apple's head of worldwide marketing, spent about 35 seconds talking about the new device. In terms of features, nothing changed between the iPad Mini 2 (formerly known as the iPad Mini with Retina) and the iPad Mini 3 except the addition of a gold model and the TouchID fingerprint sensor.

"Having effectively achieved parity between the iPad Mini and iPad Air last year, Apple has again opened up a gap between the two in terms of performance," Jackdaw Research chief analyst Jan Dawson said. "The iPad Mini is now again clearly the poorer of the two devices, and the $100 price difference between the iPad Mini 3 and iPad Mini 2 is somewhat hard to justify."

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The iPad Mini was a popular device when it was introduced, but the larger, 9.7-inch tablet dominates iPad sales. Only 17 percent of iPads in use today in the US are iPad Minis, according to Kantar Worldpanel. That percentage will likely continue to fall as more consumers opt for the new bigger screen iPhones.

"If you have two devices that are close to one another [in size], you're not going to buy both of them," Forrester analyst J.P. Gownder said. "Someone will not buy an iPhone 6 Plus and an iPad Mini 3."

It's still too early to tell just how much Apple's tablet business will be affected by its larger iPhones. The company has long said if anyone is going to hurt sales of its products, it wants to do that itself. As Cook noted during Apple's fiscal fourth quarter 2012 earnings conference call, "We've learned over the years to not fear cannibalization. We'd rather do it ourselves than let someone else do it."

But there's evidence from competitors that bigger smartphones do eat into tablets. Samsung -- Apple's biggest rival in mobile devices and the second-biggest tablet vendor after Apple -- said in July that its tablet sales were "sluggish," with customers opting for 5- to 6-inch phablets over 7- to 8-inch tablets. Samsung pioneered the phablet category with its Galaxy Note line, and the devices have become popular with buyers.

That realization is likely what caused Apple to focus its efforts on the 9.7-inch iPad and update the iPad Mini only minimally. If people aren't buying the device anyway, why devote energy to including big updates?

"They're realizing [iPad Mini is] challenged in a market when you have people who absolutely love and swear by [iPhone 6]," Technalysis Research chief analyst Bob O'Donnell said. "This is the challenge any company has when it broadens its line."

 

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The US government's wireless-spectrum auction: Why it matters (FAQ)

It's the first auction of new wireless spectrum in six years. CNET gets you up to speed on how this will affect your wireless service in the future.

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CNET/Sarah Tew

Wireless spectrum -- the radio signals designated to carry data over the air from your smartphone to the Internet -- isn't the sexiest topic in the tech world.

But spectrum has a dramatic impact on the livelihood of the carriers, and that in turn affects the quality -- and cost -- of the wireless service you get at home, at work and out and about when you're trying to binge-watch "Orange is the New Black" from Netflix on your smartphone.

It's time to pay attention, because a large swath of spectrum is about to become available -- in fact, the first auction of new wireless spectrum in six years is right around the corner.

The Federal Communications Commission is slated to hold an auction on November 13 for licenses to use spectrum under the designation of Advanced Wireless Service, or AWS-3 (which I'll explain in a minute). Wednesday marked the application deadline for the auction, which should draw multibillion-dollar bids from most of the major wireless providers, including No. 1-ranked Verizon Wireless and No. 2 ranked AT&T.

Spectrum is often referred to as the lifeblood of the wireless industry because it is. More spectrum means faster and more-reliable wireless service. Spectrum is a limited resource controlled, for the most part, by the US government, and it can be obtained only through a government auction or by acquiring a company with spectrum holdings. Because more spectrum is necessary to handle the ever increasing amount of data traffic we're consuming and sharing over smartphones, tablets and, increasingly, cars and other gadgets and machines, wireless carriers are going to fight for the spectrum they want.

CNET breaks down this year's auction, gets you background on spectrum and fills you in on what changes to expect in your wireless coverage and when to expect them.

So what's going on?

The FCC has been working for years to prepare the AWS-3 spectrum for auction. It's been a complicated task because many government agencies -- in particular, the Defense Department -- already use those licenses for their own purposes, powering their own communications capabilities.

But now there's a plan in place to move these agencies on to other bands of spectrum, and that frees up AWS-3 for commercial use. And it's not one continuous chunk; companies will bid on specific pieces of spectrum covering certain markets or big cities.

The auction is expected to generate a windfall for the government, with the FCC setting a reserve price of $10.5 billion. If the bids don't exceed that amount, the government can stop the sale.

If the bidders do reach the reserve price, companies will have to go through several additional rounds of bidding before finalizing on a sale. In the last auction, the bidding went on for five rounds, with Verizon and AT&T winning the vast majority of the spectrum. The sale raised a total of $19.59 billion.

What's spectrum again?

Don't fret; this isn't going to get too wonky. Wireless communications -- data, phone calls and text messages -- travel over the air via radio frequency. That's similar to how you listen to a radio or pick up a television signal through an antenna.

Just like there's spectrum dedicated to radio stations and television broadcasters, there's spectrum specifically allocated for use by the wireless carriers. Because of the growing needs of the wireless industry, there are many different frequencies, or bands of spectrum, that are employed.

For this auction, there are three bands of spectrum available: the 1,695MHz to 1,710MHz band, the 1,755MHz to 1,780MHz band and the 2,155MHz to 2,180MHz band. All three blocks are considered "high band," or at a frequency above 1,000MHz. That means they have a tougher time going through building walls. Conversely, they're able to carry lots of data -- imagine these wider-band blocks offering more lanes on the highway of wireless data.

That ability to carry lots of data is what makes these bands attractive to carriers, who are keen on finding a way to manage their wireless traffic. "This is addressing the continued phenomenal growth in data usage," said Mark Lowenstein, consultant for Mobile Ecosystem.

Data usage has grown by fivefold over the past five years and is expected to triple over the next five years, according to network-equipment maker Cisco. Analysts consider that to be a conservative estimate.

(You can check out CNET Senior Writer Marguerite Reardon's full explanation of wireless spectrum here.)

OK, what's the big deal?

The auction is important on many levels. For the government, the auction is about revenue, since the spectrum is worth billions of dollars.

For the carriers, this is the first major sale since 2008's 700MHz spectrum auction, which put carriers such as Verizon Wireless on the path to delivering its faster 4G LTE network.

"This auction is a culmination of a decade-long commitment with bipartisan support from members of Congress, the FCC, the administration, and the Department of Defense," according to a statement by Meredith Atwell Baker, CEO of CTIA, an industry trade group for the international wireless telecommunications industry.

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Verizon CEO Lowell McAdam. His company used AWS spectrum to help power its XLTE service. CNET

Some of the carriers already use a different kind of AWS spectrum, which sits adjacent to the spectrum being auctioned off. Because of this, AWS-3 wouldn't require a significant change in networking- and mobile-device equipment. AT&T and T-Mobile have long used AWS. Verizon Wireless uses both AWS and its 700MHz bands to power XLTE, the company's nickname for its fastest service.

The new spectrum could potentially give smaller competitors, such as fourth-ranked T-Mobile, a chance to improve the quality of their network.

"Right now, you have two really strong carriers," said Akshay Sharma, an analyst at Gartner. "This could bring in more competition."

In addition, many countries in Europe use the same bands to power their LTE networks, so there's the potential for more global harmony. For consumers, global harmony means they'll be able to pick up on more bands, potentially improving their coverage and service.

Who are the major players?

Verizon Wireless, AT&T and T-Mobile are likely to buy up the bulk of available spectrum.

Another wild card is satellite-TV provider Dish Network, which has been steadily building up a war chest of spectrum. It's unclear what Dish has planned with its wireless spectrum holding, but Lowenstein believes the company will eventually offer a fixed-mobile service as an alternative to DSL or cable to consumers in parts of the country that lack significant broadband infrastructure in the ground.

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T-Mobile is expected to be a bigger player in the upcoming auction. Above, CEO John Legere. Josh Miller/CNET

Notably missing from the auction is No. 3-ranked Sprint. It's sitting this auction out because it already has a large amount of high-band spectrum.

Verizon Wireless, AT&T, Dish and T-Mobile declined to comment.

How does this help me?

Depending on how the auction shakes out, Verizon, AT&T and T-Mobile could potentially deliver better service and handle more traffic with the additional spectrum. What that means is that you should be able to watch that streaming video from YouTube or play a real-time strategy game running on your cellular network with fewer hiccups.

Other industries stand to benefit, with cellular connections going into everything from health-monitoring equipment to security cameras to smart cars. All of that data will require a denser network.

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Ralph de la Vega, the head of AT&T mobility and enterprise. His company will be another big player in the auction. Marguerite Reardon/CNET

Down the line, 4K video, also known as ultrahigh-definition video, will become the biggest bandwidth hog. Some smartphones, including the Sony Xperia Z3, already shoot 4K video with their camera, and it won't be long before that video gets sent out over the mobile network as a stream. "That's where we're headed," Sharma said.

High-band spectrum will be able to aid in the delivery of that video, particularly in large, densely populated cities. That's why many expect bidding for spectrum in the larger cities to jump quickly.

For carriers, having more universal bands could mean they could run their networks on cheaper equipment and devices. That in turn could trickle down and lead to less-expensive smartphones for consumers.

Great. But how long until these benefits show up?

It depends. It was about two years between when the 700MHz auction wrapped up and when Verizon Wireless rolled out its first LTE market -- and the carrier was on an accelerated scenario.

It's likely that the carriers will take two to three years to upgrade their networks and devices to fully take advantage of the new spectrum. Hillol Roy, a consultant for IBB Consulting, said that the improvements to equipment-upgrade processes could take from that long down to a year, or even less.

But for a large chunk of the spectrum, it's not that simple.

What are the complications?

The Defense Department continues to use the spectrum, and while there's a plan for the agency to move, it's expected to be two to three years before the carriers can even touch the spectrum.

"I wouldn't hold my breath," Sharma said.

Is there any more spectrum?

It's funny you ask. After a six year gap between big spectrum auctions, there will be two in two years. In 2015, the FCC expects to hold an auction for spectrum in the 600MHz frequency.

The 600MHz spectrum will be sold off at the Incentive Auction, so named because a portion of the funds will go to the broadcasters who currently hold the spectrum and are being given an incentive to participate in the sale.

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FCC Chairman Tom Wheeler and his fellow commissioners are working to keep the next auction on track. CNET

"The AWS-3 and upcoming Broadcast Incentive Auction are vital to continuing to meet Americans' demands for mobile Internet and providing the US wireless industry with the spectrum necessary so it may remain the world's best to deliver new and exciting services to all Americans," Baker said.

The 600MHz band is considered more valuable because the lower band can stretch further and cover more people using less equipment. Telecommunications executives have in the past referred to the similarly low-band 700MHz swath as "beachfront property," and have similar views on the incentive auction.

The only catch is that no other carrier uses 600MHz spectrum, which means network-equipment makers and mobile-device manufacturers will need to come up with new chips and gear that are compatible with the band.

Given the intense interest in the auction, that shouldn't be a problem. Another reason Sprint isn't participating in AWS-3 is because it wants to save up for the Incentive Auction. There's some gamesmanship as the carriers attempt to jockey for the best AWS-3 auction but also save funds for the 600MHz swath.

"I definitely expect to see more-surgical bidding," Roy said.

 

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