In boardrooms across the world, computer- and mobile-industry executives were chewing their fingernails watching Apple’s announcement of its two new iPads Tuesday. How would Apple's new product reshape the market?
The greatest- perhaps only - weapon that companies like Google, Amazon, Samsung and other tablet manufacturers have been able to wield against Apple’s runaway hit has been price. If Apple could create a dynamic device and match them at the cash register too, Cupertino would bury the competition. But Apple did not do that with the iPad Mini, starting at $329. The collective exhale from Apple’s competitors can be heard around the world.
Let’s take stock of what Apple just announced: two iPads, one the fourth-generation 9.7-inch model that will immediately replace the third-generation that was released in March. The other the iPad Mini at 7.9 inches that in most aspects is a slightly shrunken iPad 2, with slightly better peripheral components, such as a better front facing camera.
First, nothing we saw today was revolutionary. With all the rumors leading up to the announcement, nobody expected it to be. It is surprising that Apple announced a fourth-generation iPad so soon after the last release, but it makes perfect sense for Apple to issue a refresh right before the holiday season (I actually always thought that the Q1 release schedule for the iPad series was a bit odd). The iPad Mini was mostly what pundits expected: smaller but well designed, still bigger than the 7-inch varieties from the competition.
Price Is The Sticking Point
From a market standpoint, Apple barely acknowledged that Google and Amazon exist. The $329+ price point of the iPad mini is targeted more towards the price points of full-size Samsung Android tablets and Microsoft’s Windows RT devices.
But Apple has made a mistake if it thinks it can marginalize devices like the Kindle Fire HD and Nexus 7, both which start at $199, as bottom feeders. These are quality devices that provide performance roughly on par with the mini. Cost-conscious consumers will gravitate towards them.
On the other hand, Apple has just significantly diversified its tablet portfolio. Even though Apple is replacing the third-generation iPad, the iPad 2 still exists at $399 (16GB storage, Wi-Fi only) and the mini plus the fourth-generation iPad give Apple a spectrum of price points from $329 to $829, depending on size, storage and cellular connectivity. While we can quibble about the starting price of the iPad mini compared with the competition, the fact that Apple has given consumers options across the market will be a powerful tool in its arsenal.
Is It Worth ~70% More?
But comparing the mini against the competition, the pertinent question is whether the extra $130 or so for the Mini is worth it instead of a Nexus 7 and Kindle Fire HD. Here, the answer is not so clear. There is nothing about the iPad Mini that tells me it outshines the Nexus 7 in such as way that I absolutely must have it. True, Apple does have 275,000 iPad-specific apps (which should transfer well to the smaller screen size), but comparing bezel sizes has never been a real selling point to me.
“Others have tried to make tablets smaller than the iPad, but they have failed miserably. These are not great experiences. But why?" said Apple's senior vice president of worldwide marketing. "First, let's look at the bezels around the display. Ours, the iPad mini, is made of aluminum and we've worked hard to make it thin so it is comfortable to hold in one hand. Theirs is made of plastic and is thicker. In fact, the whole Android product is thicker and heavier than the iPad mini even though it has a smaller display."
If we are talking about the Nexus 7, there is not a single person that I have talked to that uses the device that does not think it extremely comfortable. The Kindle Fire HD is a bit more cumbersome. Both are heavier than the mini’s .68 pounds (the Nexus 7 is .74 pounds, the Fire HD is .87 pounds). The 7.9-inch screen size of the Mini gives it more surface area than the Nexus 7 and Fire HD as well. Yet, note the irony: Apple is releasing a device it is calling the mini but at the same time noting how much bigger it is than the competition.
Consumers have to ask themselves if it is worth it to pony up the extra cash for the Mini for what amounts to a few ounces of weight, some extra screen surface area, and iOS apps. That is not to say the iPad Mini is not worth what Apple is charging, but the competition has set the pricing bar very aggressively, and Apple may not have done enough to clear it.