Friday, 6 July 2012

The Whys, Wherefores and Whens of an iPad Mini

The Whys, Wherefores and Whens of an iPad Mini
iPad Mini

The prospect of an iPad Mini has once again bubbled up to the surface following the debut of Google's Nexus 7 tablet -- as well as a great deal of chatter from the supply chain. A Mini, said Creative Strategies' Ben Bajarin, would actually represent the evolution of the iPod. "If that's the thinking, it makes sense to price it at a little more than the iPod now but below the iPad," he said. The only barrier to Apple introducing a smaller version of the iPad in the near future appears to be the objections of its deceased cofounder Steve Jobs. That seems to be the gathering consensus of opinion on the Net, as what was once an airy rumor has now become a virtual inevitability in the opinions of several market analysts.

Apple's supply chain, which in recent times has become as leaky as a tissue tanker, has confirmed to news outlets like The Wall Street Journal and to stock analysts that components are being stockpiled for a smaller iPad to be shipped in time for the 2012 holiday season.

"From what I've gathered from a number of folks in the supply chain and a number of analysts I know who track those things, Apple is serious about coming to market with the product," Ben Bajarin, a principal with Creative Strategies, told MacNewsWorld.

"It's difficult to hide what's happening on the supply chain side," he added, "and the amount of information coming from the supply chain guys are pointing in that direction."

Powerful Market Strategy

Bob O'Donnell, IDC's research vice president for clients and displays, also believes an iPad Mini is in the works. "The whole Asian supply chain is already working away on that product, " he told MacNewsWorld. "It seems to be well on its way."

In some regions in the world, like Asia, he explained smaller tablets are more popular. "If you're on a Tokyo subway, a 10-inch iPad is too big," he said. "So a seven-inch product makes a lot more sense."

A smaller iPad also makes sense as a market strategy, he aded. "This will allow Apple to hit a lower price point and extend the range of people who can afford an iPad," he explained.

"There's a tremendous opportunity for Apple to extend its reach, to extend its presence, to extend its domination in the tablet market by offering a seven-inch product," he noted.

Still Charging Premium Prices

While pricing would still be above competing seven-inch tablets -- perhaps US$249 versus $199 for a Google Nexus 7 or Amazon Kindle Fire -- the iPad Mini would have premium features its competitors don't have, the analysts maintained.

"An iPad Mini would have the incredible ecosystem that the full-sized iPad has, which the other seven-inch tablets don't have," O'Donnell observed.

In addition, the Mini would likely have a Retina display. "That's one of those things that lets you get away with pricing it higher than the Kindle Fire or the Nexus 7," added Bajarin of Creative Strategies.
However, the Mini will have more in common with those slates than it will with its big brother, Bajarin contended. "A seven-inch iPad is not going to be an 'iPad' even if they call it that," he declared.
"A 10-inch tablet is a general-purpose tablet -- you can do a lot things with it," he continued, "whereas a 7-inch tablet is really much more focused on pure media entertainment.

'Small Is the New Big'

A Mini, he maintained, would actually represent the evolution of the iPod. "If that's the thinking, it makes sense to price it at a little more than the iPod now but below the iPad," he said.

If Apple introduces a Mini, it will cannibalize some of the market for the full-sized tablet, Brian White an analyst with Topeka Capital Markets, maintained in a research note released Thursday.

"We would expect the cannibalization of the current iPad by the 'iPad Mini' to be relatively minor and potentially in a range of just 10-20 percent," he wrote, "while the market opportunity could eventually be larger for the 'iPad Mini' given the growth trends in developing countries.

"Although we would expect the 'iPad Mini' to have a lower margin profile versus the current iPad, the magnitude of the difference will largely depend on what features are left out of the smaller iPad, and thus the gap could be relatively minor," he added.

After shrinking the iPad, Apple may think about shrinking the iPhone, maintained Global Equities Research analyst Trip Chowdry. "Small is the new big," he told MacNewsWorld. "I would not be surprised to see in addition to an iPad Mini, an iPhone Mini." 

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