MarketLine Blog

The iPad mini is official, but does its price place it out of touch of the competition?

 

Cupertino technology giant Apple, Inc. (Apple) has officially unveiled its new iPad mini, a 7.9 inch screen version of its tremendously popular tablet computer to go against rival hardware from Amazon and Google. However, the higher price of Apple’s latest offering compared to its competitors’ products may serve to limit its competitive impact within the small tablet market space.

At its press event last night, after a huge degree of industry speculation and now seemingly genuine product design leaks, the company lifted the lid off its latest expansion into the burgeoning tablet computer market, a market that Apple claims it has dominated over the past few years. Nevertheless, the increase in sales of Amazon’s Kindle Fire and Google’s Nexus 7 obviously has Apple worried that competitor devices may appeal to consumers in terms of lower price points and more portable form factors. The iPad mini is, quite clearly, an attempt by Apple in order to limit the impact of cheaper tablet devices that run on other operating systems, such as Android.

During the press event, Phil Schiller, Apple’s senior vice president of worldwide marketing, focused his attention on the disparity between the size of the iPad mini’s screen size and that of its closest rival, the Google Nexus 7, which is manufactured by Taiwanese technology company Asus. The main emphasis of the comparison was the fact that the iPad mini’s 7.9 inch diagonal screen size led translates into a screen area dramatically greater than that of its 7 inch rival, which Schiller argued led to an improved experience when browsing the internet. Additionally, it was also mentioned that the iPad mini has access to over 275,000 iPad specific apps, whereas Android competitors’ apps were merely “stretched out smartphone apps”. The fact that Apple felt the need to directly compare its new product with its main rival during its unveiling is suggestive of the extent to which the company is concerned about its competition.

In an effort not to cannibalize sales of its more expensive, fourth generation iPad, which was also unveiled at last night’s event, Apple has loaded the iPad mini with less powerful specifications that its bigger brother. The iPad mini comes with an A5 processor, as opposed to the fourth generation iPad’s A6X, and a display that falls short of the company’s self coined ‘Retina Display’ tagline. Obviously, this means that consumers will be able to pick up the iPad mini for a lesser price than that of Apple’s flagship iPad.

The iPad mini is available for preorder this coming Friday, and will go on sale on November 2, 2012. The 16 GB storage Wi-Fi version will retail for $329 (£269 in the UK), with prices rising to $429 (£349 in the UK) for the 32 GB Wi-Fi version and $529 (£429 in the UK) for the 64GB Wi-Fi version. Additionally, a Wi-Fi + Cellular versions will start to ship a few weeks after the launch of the Wi-Fi versions, with prices starting at $459 (£369 in the UK) for the 16GB storage version. Although these prices are substantially lower than those of the bigger iPad, the key here is their relation to the cost of Android alternatives from Amazon and Google.

A 16GB storage version of Amazon’s 7 inch Kindle Fire HD can currently be bought for $199 (£159 in the UK) and Google’s 16GB Nexus 7 is priced at $249 (£199 in the UK). The iPad mini is, therefore, priced at a substantially higher cost than either of its two main rivals, which could put off consumers with tight budgets. Although it can be argued that the iPad mini is the technologically and ergonomically superior product, questions will be asked amongst consumers wishing to get the best value for their money. The biggest impact of this may be seen in holiday season consumer habits, as consumers look to purchase affordable gifts for friends and family.

It seems that, through its iPad mini pricing strategy, Apple is essentially occupying a different space altogether than that of Amazon and Google. Apple will hope to market the iPad mini as a premium miniature tablet device with greater portability, rather than a budget version of the larger iPad. However, the low prices of the Kindle Fire HD and the Nexus 7place them firmly within the budget tablet category, and consumers looking for such a product will still be tempted to pick up such cheaper alternative to Apple’s new product.

Time will tell if the level of brand awareness surrounding Apple’s device, as well as its premium nature, will consolidate the position of the iPad mini within the tablet market. However, if the mammoth success of the recent launch of Apple’s iPhone 5 is anything to go by, consumer demand for Apple products is still huge, which should translate into success for the company.

You might find the following Case Studies produced by MarketLine of interest:

Apple Inc.: The Steve Jobs Effect

Android: From Start-Up to the World’s Leading Smartphone Platform

Amazon Case Study: Kindle Fire to Challenge Apple iPad

 

Posted in Retail, Technology.

Tagged to , , , ,

Leave a comment

*Required fields. We will not publish your email address