iPad Mini To Be Priced Competitively - InformationWeek
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08:42 AM

iPad Mini To Be Priced Competitively

Apple's iPad Mini won't offer just a smaller footprint than today's iPad, it will be priced to compete with tablets such as Amazon's Kindle Fire and Google's Nexus 7, reports say.

Apple is prepared to defend itself in the tablet market, a market it largely defined with the iPad in 2010. Though former CEO Steve Jobs famously dissed the idea of creating a 7-inch tablet, The New York Times says that's exactly what Apple is prepared to do in order to protect its turf.

The iPad Mini, which has not been announced or even acknowledged by Apple, will offer a 7.85-inch display, according to the Times' sources. Reports from The Wall Street Journal and Bloomberg in recent weeks have also suggested the device will have a 7.85-inch screen. None of the reports has included information about the iPad Mini's potential screen ratio. Will it be the same as the iPad with a 4:3 screen, or will it be something closer to 16:9?

Adding a smaller tablet to its device roster, which would join the iPod Touch, iPhone 4S, and new iPad, doesn't guarantee Apple any sort of success. A smaller screen and more transportable footprint don't ensure a winner. That's why the price of the iPad Mini is crucial.

The iPod Touch sells for $199-$249 and the new iPad sells for $499-$829, depending on options. Looking at the entry-level prices of $199 and $499, the price gap doesn't leave Apple a lot of wiggle room to price the iPad Mini. According to the Times, Apple "is likely to sell for significantly less than the latest $499 iPad." That could mean anything, really.

Apple has new competitors to worry about. The Amazon Kindle Fire costs $199, as does the new Google Nexus 7 (made by Asus). The Nexus 7 runs the latest version of Android and includes a 7-inch display. It's one of the best Android tablets on the market and the $199 price point for the 8-GB model makes it a very attractive option for consumers.

[ Learn 10 Ways Kindle Fire 2 Must Top Google Nexus. ]

The one niggle for Google, however, is that the $199 price point doesn't leave it much room when it comes to margins, at least for the 8-GB model, which costs the company $152 to build. It has more room for profit on the 16-GB version, which costs Google/Asus $159 to manufacture, but sells for $249.

Personally, I don't see how Apple could charge less than $299 for an iPad Mini. That would give it a $100 price point above the entry-level iPod and still be "significantly less" than the $499 iPad.

Apple is expected to announce the iPad Mini later this year. The device itself is expected to reach the market before the holiday shopping season kicks off.

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User Rank: Apprentice
7/17/2012 | 6:39:18 PM
re: iPad Mini To Be Priced Competitively
I tend to disagree with your last part. Apple has clearly thought the whole paradigm thru as they control the hardware and the content and distribution of that content. They make money coming and going. Just ask the app developers, authors, and content creators about that hefty cut that Apple takes on every bite.
User Rank: Ninja
7/17/2012 | 11:59:47 AM
re: iPad Mini To Be Priced Competitively
Amazon and Google are not dependent on margins for hardware sales, because the sole point of the Fire and Nexus is to get people to buy content, which has a way bigger margin than hardware could ever have...unless it is sold with excessive prices like Apple does. Apple cannot make money in the sub-200$ range and would only enter that space to keep people from defecting to Fire, Nexus, or other small form factor tablets.
Apple needs to change their strategy overall and I don't think they are in a position to do so, because other than iTunes there is nothing that will generate income for Apple after hardware sales.
User Rank: Apprentice
7/16/2012 | 8:09:02 PM
re: iPad Mini To Be Priced Competitively
Jobs speak was seldom what it seemed. When Apple couldn't deliver the Apple experience at a price the market would bear, Jobs would dis a technology as irrelevant. That didn't mean Apple weren't working on it; it meant that since they weren't ready it must not be important.

The necessary technologies would mature and come down in prrice, the design would crystalize and voila! suddenly there was Mr. Jobs, who had never doubted, introducing the next REVOLUTIONARY! object of desire. We would gaze at it slack jawed, feigning amnesia as regards any prior "never no ways."

Given that background I've always read Jobs's disapproval of a smaller tablet as temporary. They've been working on a small tablet since the beginning. Mr. Jobs drove a lot of the original design ideas and framed the necessary questions. In fact the iPhone and the iPod Touch sprang from that effort and what's the iPad but a miniature tablet with a medium consumption focus as befits its size?

The market has spoken and the time is right. Apple's got the perfect narrative for 7.5" in their back pockets. So this is the mini tablet you've been waiting for. Forget that Mr. Jobs ever said otherwise.
User Rank: Apprentice
7/16/2012 | 7:26:59 PM
re: iPad Mini To Be Priced Competitively
I think, it doesn't make any sense for Apple to release 7"+ mini tablet. They already have iPod touch (with 3.5"screen) in less than $200 price range. And hopefully they will increase the screen size to 4" plus in coming months. Now the question is, if Apple is planning to release 7" iPad mini with a price tag of approx $199 then why would someone buy an iPod Touch?
and specially when there is no solid competition against iPod touch. So why would Apple want to kill it's own successful product? On the other hand, I think if they can decrease the price of iPad 2 to lets say between $300-350, they can easily put their competitors into further trouble.
User Rank: Strategist
7/16/2012 | 5:37:48 PM
re: iPad Mini To Be Priced Competitively
These stories keep mentioning that Steve Jobs said "no, we won't do a small-screen iPad" but they forget that Jobs had also said "no" to playing video on iPods, to letting developers create "Apps" for the original iPhone, and other such possibilities that eventually came to market, nonetheless. Jobs was no dummy: when the market was begging for something that Apple could supply, it did so ... once it figured out a way to do so effectively. A small-screen iPad doesn't make much sense when no one else had 7-inch tablets; but once the market is flooded with 7-inchers, it does make sense to enter that niche to protect its overall marketshare.
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