The iPad starts at $499, and companies such as Velocity Micro and Archos have announced Android-based tablets starting at $299 in an effort to gain a price advantage.

Immediate competition for Apple will come from Samsung, which will soon ship its . In the U.S., the Tab is priced at $399 through T-Mobile and Sprint with two-year contracts and at $599 through Verizon without a contract. The tablet has a 7-inch screen, compared to iPad's 9.7-inch screen, and is capable of playing 1080p video, while the iPad is capable of 720p. The Tab also has two cameras, a 1.3-megapixel camera in the front and a 3-megapixel camera in the back. The Tab provides eight hours of battery life, which is less than the iPad, which has a battery life that's been measured at around 10 hours.

The tablets will compete in a market that is growing quickly. Analyst firm Gartner has pegged tablet sales worldwide to reach 19.5 million units in 2010, growing to 54.8 million units in 2011.

But Apple says it is ready for the competition. CEO Steve Jobs last week . Seven-inch screens aren't big enough and companies will ultimately increase screen sizes, he also said.

But Galaxy Tab's seven-inch screen is the "optimal size," said Paul Ong, director of e-broking at investment firm OSK Group in Kuala Lumpur, who wants to buy the tablet. Ong needs to see stock prices on the go, and the smaller screen makes the device easier to carry, Ong said.