Why Apple absolutely MUST respond to Amazon and Google with iPad mini

By , Jul 6, 2012

I just read this argument how anyone that thinks Apple might do an iPad mini because of the Kindle Fire or Nexus 7 should be banned from writing about Apple. Seriously? I’d wager it’s the other way round. Apple absolutely cannot afford to sit on the sidelines while Amazon and Google take over its prospective customers on the low-end and lock them into their ecosystems.

Yes, Apple knows all too well that Google’s $199 Nexus 7 is a game-changer. Tim Cook understands this thing is gonna be big and you can bet he’ll do something about it. Why else do you think Apple has started alerting the press that it’s been working on a seven-inch competitor…

Unless you’ve been sleeping under a rock this week, you must have read stories by Bloomberg and The Wall Street Journal, Apple’s favorite unofficial mouthpieces which have revived the old iPad mini rumor. A shrunken iPad is supposedly arriving in September, at half the price, to nuke the Amazons and Googles of this world out of orbit.

But many are scratching their head. The iPad mini raises more questions than offers answers. One that’s been keeping industry watchers up at night: will its smaller touchscreen be still comfortably big enough to hit user interface targets?

Gabe Glick over at MacStories is not so convinced. A seven-inch iPad, he analyzes, would be half the iPad’s 9.7-inch screen size, making it difficult to hit the controls if apps were presented pixel-for-pixel from their 1024-by-768 pixel version.

And wouldn’t a $249 iPad mini hurt sales of its $399/$499 iPad 2/iPad 3 counterpart?

Topeka Capital Markets analyst Brian White expects minor cannibalization of the current iPad by the iPad mini (10-20 percent), but points out the smaller device may give Apple a larger market opportunity than its bigger brother, potentially even outsell it.

Specifically, the iPad mini could become a smash hit in education and developing markets like China. Also, this on two-iPad families:

“We would not be surprised if certain consumers end up owning both a regular-sized iPad and an iPad mini, swapping between the two devices for different occasions,” he writes.

White notes that iCloud further enables content on the two iPads to be automatically duplicated and easier to share among Apple devices.

You know why I’m not sold yet?


The most realistic size approximation we’ve seen so far of the regular iPad and the rumored seven-incher. Perhaps a piece of sandpaper will indeed ship with the latter?

It’s because of this quote from Apple’s conference call with investors, when Jobs unexpectedly tuned in to trash Android and address so-called tweener tablets:

Let’s talk about the avalanche of tablets. First, there are only a few credible competitors. And they all have seven-inch screen. This size isn’t sufficient to create great tablet apps.

And this size is useless unless you include sandpaper so users can sand their fingers down to a quarter of their size.

The sandpaper bit was funny, I’ll give him that.

But what about this part?

We’ve done extensive testing and 10 inches is the minimum tablet size. Given that tablet users will have a smartphone in their pocket, there’s no point in giving up screen size.

Seven inch tablets are tweeners – too big to be a phone, and too small to compete with the iPad.

The rumor-mill claiming the opposite, that Cupertino’s doing the very same device its late co-founder laughed off, implies Tim Cook is his own man who runs Apple differently (exactly how Jobs groomed him).

That was then. A lot can happen in a year’s time. 2012 is in many ways much different than 2010, when the first iPad caught Apple’s competitors on the wrong foot.

In my opinion, a 2012 Apple under Steve Jobs would no doubt realize Amazon’s success in the seven-inch space and release a competing device of its own.

Another perfectly conceivable explanation: Google’s Nexus 7 is making waves. Hence, Apple must respond.

And why is that?

Because Google is the enemy and this is a platform play.

Amazon, Apple and Google are gonna duke it out over who becomes the dominant one-click entertainment shopping mall on the web.

It isn’t about the iPad versus Nexus 7 versus Kindle Fire.

It’s iTunes versus Play Store versus Amazon Store.

In this game, hardware is only means of creating a lock-in so people stay in the ecosystem and continue spending money on content.

What scares Apple, in my opinion, is that with the Kindle and Nexus 7 both Amazon and Google realistically have decent chances of luring undecided customers or budget buyers into their ecosystem.

Once they’re in, these customers are lost. Apple can do little to persuade them to jump ship because they’ve already poured their time and money into apps and media. Who wants to repurchase their Angry Birds, Instapaper, Real Racing, weather apps, news reading clients and other favorite programs?

Back to that Jobs quote.

Yes, Steve Jobs wasn’t concerned about tweener tablets back in 2010 because they all sucked.

Nobody in 2010 had an ecosystem that could even remotely match iTunes, except for Amazon which however wouldn’t create a tablet until Q4 2011.

If anything, the Kindle Fire has proved that an ecosystem provider like Amazon can succeed selling hardware below cost and make up for losses with content sales. And just like Amazon, Google isn’t afraid to take a hit with every Nexus 7 it sells.

If I were Apple, I’d worry that Google’s created an ecosystem to rival iTunes.

Now there’s greater choice for people who aren’t keen on spending four hundred bucks on a tablet.

Do you live in the Amazon world?

Cool, there’s your tablet that you can use to continue spending money with them.

Hate Apple?

Great! Google’s got you covered.

And both technology giants will happily sacrifice their own profit just to sell you a tablet at half the cost of a 16GB WiFi iPad 2. Don’t you find this just a little tad too conspicuous?

They want you inside their ecosystems that rival Apple’s in many ways.

So, if one thing changed drastically between the first iPad’s debut in April 2010 and today, it’s competition. Apple clearly must respond to this growing threat or else the company risks losing many, many more millions of potential customers who will go Google or Amazon just because Apple doesn’t have a smaller, inexpensive iPad for them.

Hence, a $249 iPad mini.

Thoughts?

Note: this is a strongly expressed opinion piece on the topic of iPad mini and doesn’t reflect the views of the whole iDB team and all of that fun stuff.

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  • http://twitter.com/neilsardesai Neil Sardesai

    Unrelated, but what’s with that Tweetbot icon in the picture with the two black/grey iPads?

  • http://twitter.com/Wificracker jailbreak

    iPod touch 5″ will kill every thing out there i think ?

    • Eric Armstrong

      I’m with you, I’d rather see the iPod Touch get a major upgrade. Not 5 inches though, I’m thinking bigger. Why create a new product line when you could just modify the iPod Touch to close that gap between screen sizes?
      Then you’d have the big 10″ iPad, medium 6-7″ iPod Touch, and pocket size iPhone. Sounds like a well rounded family to me.

  • http://youtube.com/MathiasVerden Mathias Lindberg

    If only there was a world where a company could earn enough by doing what they love..

  • quietstorms

    I agree that Apple would probably do it to keep people in their ecosystem but I does it really help students to have a tablet that is considerably smaller than a piece of paper?

    The issue here seems to be price and not screen size.

  • Obsidian71

    Hell I just want a cheaper iPad.

  • http://flavors.me/mile MILE

    Actually anyone writing an article claiming to know what “Apple must do” really *should* be banned from writing about Apple…

    Apple MUST produce Netbooks or they’ll be doomed, Apple MUST build phones with huge screens or they will go bankrupt, Apple MUST allow Flash on iOS or else they can’t compete, yadda yadda yadda — give me a break…

    • http://twitter.com/Max_Kas Max Kaslick

      Flash on iOS? Adobe itself stopped supporting mobile flash development a few months ago.
      Congrats though to you on being the first person to time travel from 2009 Although you have missed some stuff.

      • http://flavors.me/mile MILE

        Congrats to you on totally misinterpreting (and probably not even getting) what I was trying to say…

      • http://twitter.com/Max_Kas Max Kaslick

        sorry for not being able to pick up sarcasm on a comment -_-

      • smtp25

        Knob

    • http://twitter.com/RazinYuzer Razin Yuzer

      Haha wow.. I’ve been thinking this for a long time and finally someone said it.. True man true man.. everyone is claiming to be Apple experts nowadays..

  • http://www.facebook.com/people/Thomas-N-Shanna-Bernauer/100002948594321 Thomas N Shanna Bernauer

    There will not be an “iPad mini”. Why? Because it is just “rumor” propaganda by Apple. They don’t want people buying other companies new products. You say “duh”, yeah it’s a marketing tool for apple. They said themselves that the “rumor mill” hurt their sales on the The New iPhone. So in turn they are “leaking” false specs to persuade customers into not buying new products, such as the new google 7 in. tablet. 

    • http://www.facebook.com/people/Thomas-N-Shanna-Bernauer/100002948594321 Thomas N Shanna Bernauer

      This disquss is buuuuggy! On my iphone

  • http://twitter.com/luissantana_a Luis Santana

    I think apple shouldn’t go with the iPad mini… beside apple never goes or chase any product, They got their own line of product and should be kept like that.

    • http://www.facebook.com/louiss.lim Louiss Lim

      Luis, I have the same feeling. Apple is the leader, not the follower. Be the pioneer, just do the best things for us and we will pay for it.

      • http://twitter.com/luissantana_a Luis Santana

        Louiss, That’s exactly my point. That’s why i will always follow Apple instead of other brands, for example, now Samsung S3 is a “great great phone” but c’mon what else could it be if samsung is releasing models every 6mo-1yr. That’s the least that they can do.. Apple is renewing models every 2 years. Dont get me wrong, S3 is a great device, but hold that thought and we talk later with the iPhone 5, it is the same thing here with the iPad mini, they SHOULD NOT release any version based on 7′. Steve J, pretty much wake up from the grave and die again if that happens.

  • http://twitter.com/sivkai Siv

    Thomas above me got it correct. All these iPad mini rumors are just controlled leaks by Apple to dissuade Nexus 7/Kindle Fire buyers.

    Why won’t Apple release an iPad mini? Because Apple is never one to follow the trend. They’ve got plenty of people locked into their ecosystem, most of whom are looking for premium products. A cheap iPad mini would go against this premium brand image.

    And the final thing to consider, Apple had always been one to make extraordinary profit margins. We are talking about $200 for each iPad sold, now if they were to release an iPad mini at $245 with a cost of around $200, they are only making $45. This is not Apple! Google are selling at cost because they are new to the tablet market and need this sort of start.

    Apple is not desperate.

    • http://www.idownloadblog.com/author/dujkan Christian Zibreg

      IMO, there is a great deal of people who cannot afford a $499 tablet and right now Amazon and Google have a product for them. The iPhone used to cost $499 but you can get it now for $0 with a contract. Apple aggressively explored economies of scale to make the iPhone more affordable and widen its footprint. Right now they own the premium segment, but the real growth in tablets will be mass market with $199 sweet spot.

      • http://twitter.com/aineelGD Ronald Aineel Nocum

        true that but I don’t think Apple would be going for iPad mini because it will just look like an over sized iPod Touch. What’s good for Apple, in my own observation and point of view is that it should release something extremely innovative so that even though there are low-end devices, the iPad would still get everyone’s attention. As pointed out by Siv, Apple is not desperate.

  • http://twitter.com/HiTekkSteff Stephaughn Alston

    The sandpaper joke is gettin annoying now. Was it really that funny! -_-

    • http://twitter.com/Max_Kas Max Kaslick

      Yes

    • http://twitter.com/Dongiuj DonGiuj

      It’s the first time i heard it and it REALLY isn’t funny. Sounds exactly like a computer twat would say that believes what they said was funny and would chuckle to theirself all day about it.

  • http://twitter.com/iAmManny74 Manny A. Canales

    An iPad Mini or a larger iPod touch would be great, but what is a must is a jailbreak for these devices :)

  • http://twitter.com/justinetobi Justine Tobi Dayao

    so if they are creating a budget type tablet in a form of an ipad mini..why not bring the iphone mini rumor again? because we need a budget type iphone too to compete with the lower end androids..and wait! a macbook mini too! to compete with other netbooks on the market!

  • Moe

    I think apple customer service and customer loyalty makes them the best. When u get great customer service u don’t compromise it for cheaper device that doesn’t have support as much as ios devices have.

  • firewalker746

    I agree Mile 1000%. Why does this writer seem to think Apple must compete at the low end? Never have an look how it’s working out. Why do these sites continue to publish people that don’t understand this industry at all?

  • http://twitter.com/jesere69 James Endacott

    ‘And this size is useless unless you include sandpaper so users can sand their fingers down to a quarter of their size.’

    Really? So 7inch iPad is too small for us to use? Best go back to our iPhones then!

  • http://www.facebook.com/kingwild Jay Wang

    A small inch iPad can’t use the same resolution and doesn’t change anything with UI, that’s so not Apple and bound to fail, in Apple’s standard at least. And I never believe the lock-in thing, the future is DRM-free and Apples want its too. So the real concern is just apps, I don’t believe it’s a problem as I use Android phone and iPad together, I never buy the same game on both devices and the news and productivity apps aren’t usually universal anyway.

  • http://www.facebook.com/rodriguezroger Roger Rodriguez

    When apple introduce the next ipad 4th gen next year they are going to keep the iPad 3th gen 16 gb wifi for $ 399 and the iPad 2 16 gb wifi for $ 299, so there you will have an affordable iPad