After months of hype and rumours, Apple has finally unveiled its third-generation iPad. But competitors have to fear the iPad 2, and here's why.

Apple unveiled its third-generation tablet, known only as 'iPad', at a San Francisco event last night. But with the most notable feature change a higher-resolution screen, it's also big news that the company dropped the price for the iPad 2. Apple is now selling the 16GB Wi-Fi-only model for just £329 inc VAT, and offering very good value for money in the process. A 16GB Wi-Fi plus 3G model costs £429.

The iPad 2 runs Apple's user-friendly and secure iOS platform on a 1GHz Apple A5 processor, paired with 512MB of RAM. It has a 9.7in (1024x768) multitouch display, 16GB of storage, and 0.7Mp rear- and 0.3Mp front-facing cameras. Wireless 802.11a/b/g/n and Bluetooth are supported, while the 597g, 241x186x9mm device is said to offer up to 10 hours of battery life. See iPad vs iPad 2.

The iPad 2 is widely regarded as the tablet other manufacturers wish they had built. It's still winning awards for its design, usability and performance, left, right and centre - only last week we revealed it as the winner of our Best Tablet of 2012 award, and PC Advisor readers also named the iPad 2 Gadget Of The Year. See iPad 2 launch details.

Android has been the main rival to the Apple iPad 2's crown, with particularly fierce competition in the form of Samsung's Galaxy Tab 10.1. Few would argue that Android's interface is as fluid and user-friendly as iOS, nor that its wide variety of apps is as secure as those found in the App Store. But even fewer Apple fans would consider passing comment on the company's pricing. See New iPad review.

Indeed, while the 16GB Wi-Fi-only Samsung Galaxy Tab 10.1 previously matched but is now considerably more expensive than the iPad 2 at £399, plenty of Android tablets are available for less than £200. And they aren't simply the poor man's alternative: they offer the exact same portability and always-on connectedness. Android also offers considerably more in the way of user choice, with a range of screen sizes, designs and other specifications, and none of the locked-down business of the iPad 2.

Of course, with the iPad 2 closing the gap in terms of value, and many more budget buyers now able to afford a taste of Apple, Android may have a real fight on its hands to prevent its market share sliding.

The news comes as yet another blow to the 'Android argument', which had already seen Adobe announce it would be dropping support for Mobile Flash. With Apple refusing to support the standard on its tablet, branding it a battery hog and citing poor compatibility with open web standards and touch interfaces, Flash had previously been seen as a feather in Android's cap.