iPad Mini Validates 7-Inch Tablet Market Despite Apple's High Prices

 
 
By Wayne Rash  |  Posted 2012-10-24 Email Print this article Print
 
 
 
 
 
 
 

NEWS ANALYSIS: At $329 the iPad Mini is cheaper than the iPad 2, but not by much. It's also more expensive than other 7-inch tablets, including the Kindle Fire HD which starts slightly under $200. Meanwhile, Apple also announced an upgraded iPad taking the original tablet model to the fourth generation.

If the small tablet market has had any issues building sales, the reason may well be that no major player has proven it to be a large, sustainable market. With the introduction of the iPad Mini, that’s all changed. The nearly 8-inch tablet shows this is a real market, if only because Apple is now a player.

As was the case with 10-inch tablets, it was the iPad that created the market. While other companies, notably Samsung, have also made their mark, Apple was the standard. Things are a little different over in 7-inch land. There, Samsung is a major player, but Amazon, which launched the hot-selling Kindle Fire for less than $200, is the big seller. Now it’s selling the Kindle HD at that price, complete with a real HD-quality screen. The original Kindle Fire now sells for $159.

So a major question will be whether Apple can charge twice as much for an iPad Mini as Amazon does for a Kindle Fire. This is especially true now that Amazon’s Kindle Fire HD includes that high-definition display. To be better than that, Apple would have to include its Retina display, but that’s not happening. What is happening is that Apple is shipping what is basically a shrunken iPad 2.

But no doubt when the iPad Mini hits the market on Nov. 2, it will sell like hotcakes. Rumors abound that Apple has ordered as many as ten million of the smaller devices from its suppliers, indicating that Apple plans to have huge sales to go along with the hot sales of the iPhone 5.

But what about the rest of the small tablet market? If anything, the iPad will make the 7-inch tablet market stronger. Because the iPad Mini is significantly more expensive than the competition, what it will do is provide a reason for buyers to consider smaller tablets. But many of those buyers, when they see what they can get for a lot less money from Amazon and Samsung (and a lot of other companies) for $250 and less, will decide to save money.

Amazon in particular stands to benefit. Its Kindle Fire HD is designed to be a device for consuming content from Amazon, including movies and video as well as magazines and books. You can do the same thing on the iPad with the already-available Kindle software. In other words, Amazon wins when people decide to go with the Kindle Fire HD because of its beautiful screen and much lower price, thus tying themselves to Amazon’s ecosystem.



 
 
 
 
 
 
 
 
 
 
 
 
 

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