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iPad mini: A budget tablet at a luxury price

As expected, Apple yesterday unveiled the iPad mini, a smaller version of the existing iPad, which has now reached its fourth iteration. But despite the larger-than-expected 7.9-inch display, the powerful new A5 chip, and the ultra-fast Wi-Fi, perhaps the most talked-about feature of the mini was its price. Starting at $329 for the 16GB Wi-Fi-only model and going all the way up to $659 for the Wi-Fi + Cellular version, the iPad mini can hardly be said to compete with existing budget-priced 7-inch tablets and has left many people scratching their heads as to where it will fit in an increasingly crowded marketplace.

The late Steve Jobs, Apple’s former CEO, once famously announced that “7-inch tablets were dead on arrival” but that was before the Kindle Fire and the Google Nexus 7 starting flying off the shelves. But there is only one problem with Apple belatedly entering this smaller tablet market: the starting price of the iPad mini is 65 percent higher than its cheaper-priced rivals.

Clearly, Apple is not producing a 7-inch tablet to cannibalize its existing iPad customer base. Instead, the idea is to persuade other price-conscious consumers that they really can afford an iPad, or try and pry Kindle and Nexus 7 customers away from their chosen brands.

But does the iPad mini have enough extra features to convince tablet-seeking consumers to shell out the extra $130 or more? Of course, there is always the Apple name and for some consumers that is more than enough reason to line up outside the nearest Apple store. For others, the decision may be harder.

What we do know about the iPad mini is that it appears to have all the features of the larger iPad, with the exception of the Retina display. Both the mini and its bigger brother have brand new chips and Apple’s new super-fast Wi-Fi technology; they both have FaceTime, the iSight camera, and full 1080p HD video recording; they both have Siri, AirPlay and built-in iCloud capability; and they both have access to 275,000 custom iPad apps. As Apple itself says, the “iPad mini is an iPad in every way, shape, and slight smaller form.”

And it’s very likely that it’s this similarity to the larger iPad that has driven the pricing strategy of the iPad mini. After all, pricing the mini at say $259 or less would not so much establish a new price point for 7-inch tablets but rather point the finger at the larger iPad as being seriously overpriced.

But there is another theory: Apple might be hoping to emulate the highly successful strategy that was established with the iPod. After introducing the original iPod classic, Apple then locked up the entire digital music player market by launching the iPod mini, followed by the shuffle, the nano, and finally the iPod touch.

But two things are very different when it comes to the iPad mini: a) there is already a thriving market for 7-inch tablets at much cheaper prices, and b) the functionality of the two iPads may not be sufficiently different to generate distinct market demand.

However, it would be reckless to suggest that the iPad mini won’t be successful. Those who want the best that money can buy will still opt for the larger iPad with its beautiful Retina display, and those who want value for money will still opt for the Kindle Fire or the Nexus 7. Where does that leave the iPad mini? Somewhere in between – and that’s not a bad place to be!

Comment by Alexandra, posted 10/25/2012, 11:52 AM:

I think its simply too expensive for such a device. Even when it comes with an apple for free ;)
Comment by emis, posted 10/24/2012, 8:34 PM:

Viva el medio tic que revive la informacion y da a conocer muchos temas que no sabemos
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