Wednesday, October 24, 2012

Apple's iPad Mini will compete on price NEXT year

Yesterday Apple released the iPad Mini. It's a 7.9" screen - the same dimensions aspect ratio as the current iPad, but smaller. It's made to compete against Google's Nexus 7 and Amazon's Kind Fire HD.

However, the biggest complaint by observers has been that Apple messed up on price by making it too expensive and missed an opportunity to kill the competition. Here's a quick table of the prices for the Nexus 7, Kindle Fire HD, and iPad Mini. Yes, I know there are tons of different flavors, but all of them cost more and this is what people are really comparing.

Nexus 7$199$249
Kindle Fire HD$199$249
iPad Mini$329$429$529

Apple's prices aren't even in the same hemisphere in terms of percentages. Relative to household income they're closer, but these tablets are targeting the cost conscious shopper. So, Apple made a tablet to compete in the low end, but it looks like it's prices are way too high to effectively compete.

But here's the deal, it's made to compete on price NEXT YEAR.

That's right Google and Amazon, you're on notice that you have one year to improve the experience on your tablets.

If you've been paying attention, when Apple releases a new iDevice they don't just discontinue the previous version. They keep the lowest storage device and drop the price by $100.

Look at the table again and imagine this iPad mini at 16gb for $229. All of the sudden it's competitive on price!

Apple came out with the iPad mini at $329 for two reasons:

  1. They can cater to people who want a premium device in a handheld size
  2. They gave themselves room to drop the price on existing models when new ones come out to cater for those looking for a cheap tablet.
The gamble Apple is taking is that Amazon and Google won't be able to improve their devices/ecosystems enough to better compete in a year. It's not a sure bet, but I tend to agree with Apple's assessment of the tablet field.



  1. Anne & YMS BUSHAN1:40 PM

    Just my 2c

    There was a rumor that iPad mini would have a 8GB version as well. May be they should release this version for $279.00 which would keep every one happy!

  2. Hawkeye3:44 PM

    Dropping a $100 from $500 is a 20% discount; from $329 it's a 30% discount, and seems less likely. A $259+ price would be more inline with precedent.

    Last year's model of the iPhone is only discounted 15% (based on its unsubsidized $650 price).

  3. Very interesting observation and one that I actually agree with. Even though Android's coming up with some amazing hardware (check out the Xperia Z tablet from Sony), in terms of the UX it still isn't anywhere near the iOS experience (on a tablet).