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10/24/2012
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Eric Zeman
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iPad Mini: The Great Price Debate

The entry-level iPad Mini costs $329, which raised some eyebrows. Here's why analysts say the iPad Mini is priced right--and will steal sales from $199 Android tablets.

iPad Mini Tablet: Visual Tour
iPad Mini Tablet: Visual Tour
(click image for larger view and for slideshow)
Apple announced the iPad Mini on Tuesday. The smaller tablet features a 7.9-inch screen, 16 to 64 GB of storage, a 5-megapixel camera with HD video capture, and a dual-core A5 processor. Early hands-on impressions of the device give it a lot of credit for being so thin and so light.

Specs aside, one thing that has sparked a lot of discussion is the iPad Mini's price. The entry-level version (Wi-Fi only and 16GB of storage) costs $329. Many were apparently surprised by what they consider to be the high price. There was an expectation that Apple would price the iPad Mini competitively against the $199 Amazon Kindle Fire HD and the $199 Google Nexus 7.

[ For more on Apple's diminutive new device, see Apple iPad Mini: Pros And Cons. ]

Perhaps some people have forgotten that this is Apple we're talking about. When has Apple ever made cheap products? Never, as far as I can remember. Apple has always commanded a price premium for its gear, and the iPad Mini demonstrates that Apple isn't about to alter this strategy.

Speaking to Reuters, Apple VP Phil Schiller said, "The iPad is far and away the most successful product in its category. The most affordable product we've made so far was $399 and people were choosing that over [7-inch tablets]. And now you can get a device that's even more affordable, at $329 in this great new form, and I think a lot of customers are going to be very excited about that."

When you look at Apple's i-device lineup, there's not a lot of wiggle room on the pricing.

The new iPod Touch costs $299 for the 32GB version and $399 for the 64GB version. The iPod Touch has a 4-inch screen.

Then there's the 2011-era iPad 2, which is still available. Apple sells it for $399. This is, of course, followed by the fully featured iPad with Retina Display at $499.

Clearly, the iPad Mini had to be priced between the $299 iPod Touch and $399 iPad 2.

Cannacord Genuity's Michael Walkley told his investors today that the iPad Mini is priced exactly right. "We believe the iPad Mini has raised the bar relative to lower-priced competing tablets with impressive hardware specifications, competitive pricing, and the leading software ecosystem that includes over 275k iPad-specific applications. In addition, we believe Apple's pricing of the iPad Mini ($329 for Wi-Fi-only, $459 for 4G base models) will enable Apple to maintain dominant share of the growing tablet market by providing better hardware and a much more integrated and robust user experience at competitive pricing versus lower priced competing tablets."

In other words, the iPad Mini is set to eat the lunch of the $199 Android tablets, even though it costs $130 more.

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sebringmx350
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sebringmx350,
User Rank: Apprentice
10/29/2012 | 11:30:07 PM
re: iPad Mini: The Great Price Debate
Well, Apple has a lot of decent products, made with decent components and a steady supply of idiotic devotees who will pay too much for their products. As to the idea that they would lower their ego enough to give their mooch customers a break on pricing is laughable. There is a steady supply of people out there who would rather eat pet food than explain why they bought something else and used the difference to buy food. Good On You Apple
ANON1244127235231
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ANON1244127235231,
User Rank: Apprentice
10/29/2012 | 12:20:04 PM
re: iPad Mini: The Great Price Debate
This is pretty simple - I will purchase a Samsung Tab 2 7.0 for $199. Add an 32Gb SD memory for $24 and have plenty left to purchase apps. iPads are great, but the premium price, especially for the iPad mini is hard to justify.
Alienjones
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Alienjones,
User Rank: Apprentice
10/27/2012 | 8:03:49 PM
re: iPad Mini: The Great Price Debate
Wow!
I remember when GM (Australia) first converted the German Opel to a Holden. They left out the 2 door version claiming it was unsuitable for Australian buyers. Then a real smart ex public servant who discovered more money painting house roofs and tapping into wealthy people's pockets with promises of eternal greatness, figured he'd import the longer Opel doors and build his own flavour of unique 2 door cars he aptly labelled "Limited Edition".

An even smarter commentator who declined the investment offer remarked this is fantastic (using the real meaning of the word). "Pay twice as much for half as much". The venture went belly up... I wonder why?

For a while I thought Apple had found a away to tap into Steve's brain from the after-life but now I'm sure it's all smoke and mirrors. Anyone as old as me can surely remember the early Apple computers. Mine cost over $4k ($15k in today's money) by the time I bought the mandatory 'optional' graphic card, essential if you wanted to write a letter with it. People still ask why I think Steve was an inventive fellow, not a genius.

And now as if by the same form of magic that created the first smoke and mirrors computer that undersold the PC and its clones for long enough that Bill Gates could make enough to bale Apple out of financial crisis...

We have the latest iteration of a wheel, reinvented to roll out and run over it's rivals at an absurd price intended not to upset its big brother's sales but still offer everything except bulk. Let me predict its major sales pitch will be "pocket size". Just like Samsung's oversize smart phone. My brain teaser for the day is...Not everyone has a pocket in their dress.
jkniskern197
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jkniskern197,
User Rank: Apprentice
10/27/2012 | 3:36:46 PM
re: iPad Mini: The Great Price Debate
The iPad Mini pricing fits nicely for prospective iPad buyers. The Mini is only 1.8" smaller in the diagonal direction than the original (7.9" versus 9.7").. Yet it is $170 cheaper, almost half the weight and fits better in pockets. For all those attracted to the iPad (forget the competition), this looks like a more practical buy.
ANON1235574790004
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ANON1235574790004,
User Rank: Apprentice
10/27/2012 | 1:21:10 PM
re: iPad Mini: The Great Price Debate
Since I purchased my Samsung Tab2 for that price, used it all week at Gartner Symposium, used their app for the conference all week, charging it on Sunday, then not again until Friday, I have no sympathy for those paying twice the price for the Apple products. I see why Apple is suing, as they will slip again, just as they did with Macs versus PC's once the competition is recognized as real and better value. Apple will have to innovate to keep winning, but we're not seeing much of that with follow-on variances of existing products.
gtigerclaw
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gtigerclaw,
User Rank: Apprentice
10/27/2012 | 12:38:29 PM
re: iPad Mini: The Great Price Debate
I know that I read where the Apple PR department put out a press release on Friday saying that they sold out iPads on pre-order in the first 20 mins. Rumors were that they ordered 10 million from their Chinese slave shop to get started.

Does anyone know if this is true or another Apple rumor trying to jack-up flagging share prices?
ANON1244118138979
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ANON1244118138979,
User Rank: Apprentice
10/26/2012 | 2:07:34 PM
re: iPad Mini: The Great Price Debate
Hurry sheeple, a new iDevice!!! Dont walk, RUN to your nearest Apple store and line up!
hohum
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hohum,
User Rank: Apprentice
10/25/2012 | 11:33:51 PM
re: iPad Mini: The Great Price Debate
Well thats hype... ( not that I expect anything else)
I wonder why saying "I think they are wonderful"
is a justification of usability?
It will be interesting to see the response over time( after the intial fanboi purchases)

IPAD sales are on the decline and this is even a smaller niche market.

But I am sure it will be someone elses fault... as always
vksbbr
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vksbbr,
User Rank: Apprentice
10/25/2012 | 9:35:13 AM
re: iPad Mini: The Great Price Debate
Steve W
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Steve W,
User Rank: Apprentice
10/25/2012 | 2:50:50 AM
re: iPad Mini: The Great Price Debate
Oh, the irony!

Apple did introduce one competitively priced product: the original iPad was introduced at $499.00; approximately half the expected price, and less than every tablet then in production or development. It was "back to the drawing boards" for everyone else.

The first iteration of the iPad mini, the Newton Message Pad, was 7.25" H x 4.50" W x 0.75" D, weighed 0.9 pounds, and sold for $699. The iPad mini is thinner, lighter, and costs half the price. The 20 Mhz ARM processor has been upgraded to a dual core A5 rumored to be 50 times as fast. The 4 MB ROM has been upgraded to a 16 GB SSD. The optional 9,600 baud modem has been replaced with an optional LTE cellular package.

The Message pad did have two "advantages" that all Apple haters would approve of: It was powered by removable AAA batteries, and came with a stylus.

Sorry, Apple! The Message Pad was judged to be "too big for normal pockets", and the iPad mini is taller and wider. One third the thickness is not good enough. Didn't Palm teach you anything?

[/sarcasm]
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