The Cupertino, Calif., company announced the new version of its tablet Tuesday, priced at $799 for Wi-Fi only and $929 for a cellular network-connected model.
Currently, Apple's largest storage capacity tablet is a 64 GB iPad, which sells for $699 for Wi-Fi only and $829 for the cellular-enabled version.
The 128-GB iPad model appears to be a direct shot at Microsoft, which will be releasing its own tablet, the Surface Pro, just a few days later, on Feb. 9.
Microsoft says the Surface Pro is designed for professionals and heavy-duty users who want a powerful device with vast storage space -- features Apple addresses with the 128 GB iPad.
The Surface Pro starts at $899 for a 64 GB version and $999 for a 128 GB model.