Apple Readies iPad ‘Mini’
The blogosphere, twitterverse, etc. have all been aflutter recently with rumors that Apple is planning to introduce a smaller iPad. The objective: to swat away competition from Amazon’s pesky Kindle Fire and any others looking to gain entry on the lower end of the tablet market.
A note by Piper Jaffray analyst Gene Munster to investors, referenced in numerous news reports, said that Apple could expect to sell as many as six million of the new, smaller iPads during the holiday season. Mr. Munster believes the new unit would come with a screen under eight inches, include 16 gigs of storage and be priced at $299. That size and pricing would give it an entry point above its iPod Touch and below its entry level iPad.
While rumors have swirled about a new "mini" iPad in the past, they have amounted to nothing more than idle speculation up to this point. Mr. Munster and others believe, however, that reports from Asian suppliers are reliable and indicative of Apple management’s intentions. The introduction of lower priced iPad would almost assuredly cut into Android tablet sales.
Speaking of Android, All Things Digital has reported that Amazon plans to ship some two million units of its newest generation Kindle Fire during the third quarter. The new thinner and lighter unit will come with a variety of upgrades, including an improved display and built-in camera. The report did not include planned pricing for the new tablet.
Discussion Questions
Discussion Question: What do you see as the pros and cons of a decision by Apple to introduce a smaller, lower priced iPad? Do you see Apple facing any serious competition on the higher end of the tablet market?
Apple seems to own the high end of the tablet market, as long as it keeps adding features (such as retina display) for the same price. The move to a smaller, less expensive iPad is a flanking move that will affect the Kindle Fire, Google tablet and other competitors. (And nobody knows what Microsoft will sell its tablet for this fall.) The risk, however, is in cannibalizing sales of the full-sized iPad, so this will present some marketing challenges to Apple at the same time that it works on the iPhone 5 and “smart TV” concepts.
There’s a limit to the number of devices — even Apple devices — anyone needs.
Either you need a larger screen — and therefore have a tablet or, perish the thought, use a laptop — or are content with a small screen — in which case you have your e-reader or phone.
I just find it hard to believe the mini-tablet will convert all those current iPad users to the doctrine of promiscuous technology platforms. If the new Microsoft tablet works as hyped Apple may face some serious competition for the first time in years. There are some functions tablets need to have to reach the next sales plateau, (like say the ability to edit PowerPoint files). If Microsoft beats Apple to the functionality punch they may, (shocking as it to think about,) really challenge Apple on the high end.
Once upon a time there were vinyl LPs, and tapes and CDs and mini-CDs and … well you know how that story ends.
Apple’s problem at the end of the day is its price point. It’s getting a little pricy to have a new Apple laptop, tablet, iPod and now a mini-tablet. Something has to give, even among Apple loyalist like me.
What’s interesting in this market right now is the progress that Samsung is making. Clearly, this would be a move that Apple would undertake to defend against the Galaxy platform … which, if you’ve used one at all, is pretty fantastic. Very impressive product.
We all thought Microsoft would be the one to come up and bite the Apple, but now it looks like some real threats are coming out of South Korea. Next thing you know, Samsung will develop a killer store model — then, the fun will really begin.
Apple price points are always an issue. Generally the functionality and cool factor outweigh price concerns. If competitors offer the same functionality at a lower price then there will be strong competition. If Miscrosoft’s new product offers additional functions then their product will compete at the high end. What functions do consumers want and need? Which functions will be useful? What size screen is necessary? Whether this new smaller iPad actually gets introduced will tell us what Apple believes is important to consumers.
It’s the right thing to do. The current iPad is too large to be an on-the-go device and the iPhone has too small a screen to be very navigable. A smaller iPad may be exactly the compromise that’s required. As far as competitive factors are concerned, as long as Apple leads by design I suspect they’ll be ok. Their own failure to continue to innovate is really the most fearsome competitor they risk falling prey to.
Apple doesn’t have any competition on the high end of the tablet market. The pros for launching the smaller, lower priced tablet is that it will be the ‘toy’ of choice for every kid that has an iPod and can’t step up to the full size tablet. It won’t cannibalize the larger size tablet, but expand the whole category.
This may have some bearing on the use of tablets in store environments. Some retailers have experimented with associate devices and applications, using iPhones or iPads in some cases. A smaller version of the iPad may result in some retailers equipping employees with a tablet, providing a “middle tier” option between the phone and tablet.
The introduction of the smaller iPad is a brilliant move which will create new users vs. significantly cannibalizing current iPad sales. The only surprise is how open the conversation is vs. the historic super-secrecy of new product launches. Both Apple and Microsoft, and probably Samsung, will soon provide more editing functionality so the main challenge for Apple will be to retain the cool factor which can continue to distance them from the competition’s functionality and price-competitiveness.
The introduction of a smaller iPad is a smart move although perhaps a bit belated relative to the share gain that might have resulted in beating the Kindle Fire to market. I don’t believe there will be much cannibalization…either you want the full size iPad screen or you want something smaller. But there would be little reason to own both so there could be some compromise on which model to own going forward for some users.