Apple has had an amazing run of successes: iPod, MacBook, MacBook Pro, iPhone, iPad. Next on Apple's release schedule, if rumors are to be believed, may be an “iPad Mini,” a 7-inch version of the popular tablet. Would such a device extend Apple’s mobile dominance – or end the company's winning streak?
The smaller iPad might be available by the end of the year, according to unnamed sources within the company, quoted by Bloomberg.
It is easy to imagine what the product would look like. Think of an overgrown iPhone or iPod Touch or an undersized iPad. It would be slender, easily held in one hand, with a brushed aluminum back and a thin bezel. Apparently it would not include Apple’s superb Retina display, but instead it would use glass that can be found in older products like the iPhone 3GS or original iPad. In short, it would be the quintessential mid-level Apple product.
But here is the rub: Apple does not normally concede to market demands and release mid-level products. Through its history, Apple has positioned itself at the high end of consumer electronics. It does what other companies do but better, and it charges a premium for the privilege of owning its products. The robust margins on its mobile devices yield billions of dollars per quarter. It is hard to imagine that Apple would compromise its margins by creating a mid-market device in the 7-inch tablet space, where it would have to compete aggressively on price.
Apple established the market for digital music players (iPod), touchscreen smartphones (iPhone) and large media tablets (iPad). By defining those markets, Apple made itself the incumbent to which other companies needed to react. And react they have with a variety of tablets and smartphones in a dizzying array of sizes and form factors. Companies have tried to differentiate their products by making smartphones with bigger screens than the iPhone or smaller screens than the iPad. The 7-inch range is an area where competitors have found a semblance of success, including HTC (Evo View and Flyer tablets), Research In Motion (BlackBerry PlayBook), Samsung (Galaxy Tab 7-inch) and Amazon (Kindle Fire). Google followed suit with the 7-inch Nexus 7, available starting at $199 through Google Play.
Which raises the question: Is there a substantial market niche for 7-inch tablets? Outside of the Kindle Fire and (likely) the Nexus 7, no tablet of any size has really gained any traction other than the iPad. And there's an argument to be made that those devices sold well based on their form factor, not their price. Amazon and Asus/Google make almost nothing selling those devices. They break even on hardware, more or less, and look to make money through digital content such as books, movies, apps and music. Consumers have responded well to the 7-inch e-reader, but really, when it comes to mid-market tablets, it is all about price.
So Apple would be moving into an area where there is questionable consumer demand, an undefined audience and several incumbents that control a good portion of the market. That is not a very Apple-like strategy.
Apple's target for an iPad Mini would not be people looking for a smaller form factor or a touchscreen e-reader. It would be people looking for an iPad experience without having to pay Apple’s price for a full-size iPad (starting at $499 for the latest version, $399 for the older iPad 2). Apple could satisfy that audience despite the factors working against it in the 7-inch market. People buy Apple products because they like to buy Apple products. The strength of Apple’s brand would sell enough iPad Minis to merit the term "success."
But there are other questions to consider. Would a lower-priced iPad Mini cannibalize sales of more expensive iPads? How would pundits and critics respond to a mid-market device that did not push the boundaries of innovation? Could Apple redefine the midsize tablet by creating something that is not just a tablet, perhaps a crossbreed that puts the 5.3-inch Samsung Galaxy Note “phablet” (phone tablet) to shame?
Entering the 7-inch tablet space would be a tricky proposition for Apple. It would need to produce something that is competitive in terms of features and price with the Nexus 7 and Kindle Fire, without eating into its margins or sales of its other devices. We will find out by the end of 2012 whether Cupertino can pull it off - that is, if the rumor is true.