Apple may be planning to release a smaller, iPad “mini”, according to the latest rumors about the company. Even though the late Apple co-founder and CEO Steve Jobs reportedly hated the idea of a mini iPad, analysts say that a smaller, cheaper version of the iPad would put Apple’s tablet competitors on their death beds. Even though dozens of competitor tablets were debuted at CES 2011, none of them gained any significant market share against the iPad.
Apple’s biggest competitor in 2011 was Hewlett Packard, which sold just under 1 million TouchPads for the year. However, most of those sales were driven by a massive price cut ($99 for 16 GB, $149 for 32 GB) due to lackluster sales at the original price ($499 and $599, respectively). Even though the HP TouchPad ultimately failed at being a long-term competitor to the iPad, the surprisingly strong demand for a less advanced tablet – at the right price – was a wake up call to consumer electronics manufacturers. The large sales numbers of the HP TouchPad at reduced prices indicated that consumers are willing to purchase a less advanced tablet if it cost significantly less than the iPad, as long as it still had some solid capabilities.
Amazon proved this during the 2011 holiday season with their launch of the Kindle Fire, a smaller, less advanced, and cheaper tablet. The Kindle Fire can run some applications, browse the web, serve as an e-reader, and that’s pretty much it. But if all you want to do are those tasks, plus have direct access to your Amazon Prime account, then the $199 device is a way better value than the iPad, which costs several hundred dollars more.
Finally, enter into the market Samsung Galaxy Note (which we previewed at CES 2012), and you have a marketplace where “tablet-lites” are getting serious consideration from consumers.
Apple isn’t used to being second place when it comes to any area of consumer electronics, so it makes sense that they would be planning an iPad mini. According to the rumors, Apple could sell a 7-inch iPad mini for around $329, which is still more than the $199 Kindle Fire, but par with the Samsung Galaxy Note (accounting for your 2-year phone service discount).
If Apple is to go in the direction of an iPad mini, it would be an abrupt change from less than two years ago, when then-CEO Steve Jobs verbally destroyed the concept of a 7-inch tablet from Samsung. Jobs stated, “The reason we wouldn’t make a 7-inch tablet isn’t because we don’t want to hit a price point, it’s because we don’t think you can make a great tablet with a 7-inch screen. The 7-inch tablets are tweeners, too big to compete with a smartphone and too small to compete with an iPad.”
Unfortunately, Jobs isn’t around anymore, and if mini tablets trend toward pulling market share away from the iPad (as opposed to expanding the pie of market share), then Apple may have no other choice but to start making an iPad mini.