Smaller iPad may be competition’s worst nightmare, analysts agree

By , Oct 19, 2012

Analysts are almost busting their buttons to tell investors just how big a deal they expect is a smaller iPad, widely thought to be up for an introduction next Tuesday. One well-known Apple watcher foresees huge headaches from rival seven-inch tablet makers, describing the so-called iPad mini as “competition’s worst nightmare.”

Shaw Wu of Sterne Agee writes the iPad mini will come on the scene as Apple’s competitors are already running hard just to keep up with the larger iPad 2.

The Cupertino, Caliornia gadget designer may even phase-out the $399 iPad 2 in order to focus attention even more strongly on the leading brand. Add a 7.85-inch iPad mini expected to sell for under $300 – and rival tablet manufacturers lose both the size advantage as well as the lower price tag…

Although Wu believes (via AppleInsider) Apple could “go for the kill” and sell the smaller iPad in the same $199 range as Amazon’s Kindle Fire HD or Google’s Nexus 7, the company doesn’t have to harm its palatial profit margin in order to overwhelm its rivals.

Indeed, the analyst believes the smaller iPad could carry a $350 price tag – just shy of the $399 iPad 2 – and still have plenty of sales.

A similar point was made earlier today by another analyst.

Apple has leveraged its design and engineering expertise to turn a tidy profit during an otherwise down period of PC makers, Rob Cihra of Evercore Partners noted.

Its control of both hardware and software allowed Apple to “pull dollars away from otherwise commodity markets and incumbent competitors”. The company, for instance, has reported a 30 percent increase in 2012 revenues compared to a four percent decrease for PC makers, the analyst told investors.

Cihra believes Apple could phase-out the iPad 2 to offer “clearer product lines”.

This would make sense given reports that the iPad mini will easily run apps designed for the iPad 2.

By the way, if the somewhat reliable DigiTimes, an Asian trade publication, is to be believed, Google will roll out a $99 Nexus 7 tablet in time for Christmas.

What’s your opinion?

With the two leading selling points – size and price – largely coopted by Apple, how will rival tablet makers compete against a smaller iPad?

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  • http://www.facebook.com/profile.php?id=100000514380051 John Sklikas

    If Apple removes the iPad 2 then Apple could do the overkill by pricing the 16GB model for 199$, the 32GB for 299$ and the 64GB for 399$.

    • burlow

      they couldn’t do that, the newest ipod touch 32GB is already $299, they wouldn’t price the larger ipad the same.

      • http://www.facebook.com/profile.php?id=100000514380051 John Sklikas

        So the expected price is 399$… That’s way too expensive for a small version of the iPad (think that you can buy an iPad 3 for just 100$ more)

      • burlow

        some people will want the smaller size though, so for them it will be win-win: they save $100 and get a more portable device.
        It’s like smartphones – not everyone wants a 4.8″ screen, so getting a smaller phone is desired, and that it’s cheaper is just a perk.

      • http://www.facebook.com/profile.php?id=100000514380051 John Sklikas

        You have a point but those people are about 40% of the potential buyers. The rest of them (60%) would want to buy a good tablet with a good price and why buy the iPad mini when you can buy an iPad 2 from ebay (if Apple removes it) with the same or less amount of money?

      • burlow

        Well, seeing as storage is in $100 increments, I could see $400 for 7.8″ , 16GB model very easily. $500 will get you a faster processor and bigger screen, but for a lot of people that won’t matter IMO.

      • http://www.facebook.com/profile.php?id=100000514380051 John Sklikas

        Yes I think I get your point now. Because most of Apple’s consumers don’t care about the specs they would buy the iPad mini and the choice would be: “do you want a 7.8” screen or a 10” screen?”. Though I think that if this happens the iPad mini would truly cannibalize the 1/5th of iPad sales and even if it Apple sells it for 399$ which is just 100$ less they would lose 200 million dollars(this number occurs by: We have 10 million iPad sold, the 1/5th is 2 million and if Apple loses 100$ for each one, they will lose 2million * 100 = 200 million dollars). Yes a profit will occur by subtracting from the 400$ million of revenue the 100$ million of loss but that’s 100$ million less than the iPad 3 sales. And Apple most of all is a company so they might sell it for the iPad 3 price which is kind of crazy.

    • Mcsquared

      Why do people think a bigger product is more expensive..

      Remember that an iPhone costs 900$ (without upgrade) and an iPad costs $500?

      • http://www.facebook.com/profile.php?id=100000514380051 John Sklikas

        Well first, if I buy a factory unlocked iPhone without upgrade I would pay 699$ and not 900$. Secondly, we are speaking for the difference of the iPad mini with the iPad and not for the difference of the iPhone with the iPad. Thirdly, an almost identical product to the iPad with a smaller screen has lower production costs so it should cost less.

  • CollegiateLad

    Can’t wait any longer!!! Must have.

  • Ignacio Irigoyen

    If android tablet keep lowering the price to win sales in tablets, Google will end up paying you $99 chose a nexus and not an ipad

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

    Hoping for an 8gb wifi @ $200

  • http://www.twitter.com/GeorgieAce Georgie Acevedo

    Black iPad mini is going to look so sexy

  • http://www.facebook.com/abraham.utrera Abraham Utrera

    I know it will be a good product but I need to know the price

  • http://twitter.com/digitalfeind Dani Hayes

    I think apple may have shot themselves in the foot with the mini. That is to say if it has a camera. An iPad mini will kill their iPod touch sales if it’s set under $300. Set it too high and you step on the toes of the iPad.

    • http://www.facebook.com/joe.jonsen Joe Jonsen

      um some folks dont want an ipad and for them there is the touch

  • http://www.facebook.com/joe.jonsen Joe Jonsen

    smaller ipad is golden.. pure money.. i have the 3 and i wnt the mini.. even though i dont need it. i may sell my 3 to get the mini

    • http://www.facebook.com/joe.jonsen Joe Jonsen

      lol no i wont i will keep and use both..lol