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Why Google and Amazon hate Apple’s $329 price tag on iPad mini

Friday, October 26, 2012 · 2:32 pm · 42 Comments

“What’s wrong with $329 as the entry price for an iPad mini? Absolutely nothing. It’s affordable, even for those attracted to the inferior tablets from Google and Amazon,” Kate MacKenzie writes for PixoBebo. “[Those tablets are] priced less because both the Nexus 7 and Kindle Fire HD have fewer features.”

“Besides the tech media intelligentsia, who else hates the $329 iPad mini price tag? Google and Amazon,” MacKenzie writes. “Both Google and Amazon are on record as saying their 7-inch tablet-like devices are sold at cost, probably somewhere just over $200 for the entry level models.”

MacKenzie writes, “Is it any wonder that Amazon lost money this past quarter? Is it any wonder that Google’s financials are the worst in many years? … How much longer will beleaguered Google and Amazon stay in the tablet business? Ask yourself, ‘How much of a bargain is a $200 tablet if the company that makes it stops making it because they can’t make money selling it at that price?‘”

Read more in the full article here.

Categories: News

Tags: 7-inch tablets, 7.9-inch iPad mini, Amazon, google, iPad mini, Kindle Fire, Nexus 7

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Comment Feed

42 Comments

Troy

Friday, October 26, 2012 - 2:35 pm · Reply

New term for the fandroids: OOA … (Obsolete On Arrival)
Chaz

Friday, October 26, 2012 - 2:37 pm · Reply

Yea, market share, yea, that’s the ticket.
- 1Racer
  
  Friday, October 26, 2012 - 3:10 pm · Reply
  
  We’ll make it up on volume.
  - Whatever
    
    Friday, October 26, 2012 - 3:32 pm · Reply
    
    OK Lets do the math – no money times any number is no money – basic math
    - darknite
      
      Friday, October 26, 2012 - 3:43 pm · Reply
      
      Keep your damn logic, facts, and mad math skills to yourself. Wallstreet is NOT amused.
    - Swing Geezer
      
      Friday, October 26, 2012 - 4:17 pm · Reply
      
      Elitist Bastard!
      - markar12
        
        Friday, October 26, 2012 - 6:26 pm · Reply
        
        The elite-ist are the anal-ist at Wallstreet that calculate their figures by multiplying and dividing by Zero.
    - 1Racer
      
      Friday, October 26, 2012 - 7:36 pm · Reply
      
      in some cases it’s negative money times number units sold = more negative money. That’s a sound strategy. The more we sell, the more we lose. wtf…
Able Archer

Friday, October 26, 2012 - 2:43 pm · Reply

… Beleaguered Google. I love it!
Synth

Friday, October 26, 2012 - 2:44 pm · Reply

And if Google or Amazon were to raise their prices even by $50, then the iPad looks a lot more attractive than it already is.

And like I’ve said before, next year Apple will be able to offer the iPad mini at close to $200 and still make 30% margins while Google and Amazon will still be selling at cost, and still have no business plan for their tablet business.
Billy Mitchell

Friday, October 26, 2012 - 2:45 pm · Reply

I honestly don’t know a reasonable person who thinks $329 is too high for an iPad mini. Ya, they could have made it $299, but the price is fine. You just can’t make a tablet today of quality and sell it for $200. If Amazon and Google were making it up on other post-purchase services, their tablets would be better quality.

Apple will sell millions of iPad minis– it’s gonna be a blockbuster product.
jimg

Friday, October 26, 2012 - 2:50 pm · Reply

I will never, ever understand Amazon’s thinking about selling the Kindle at cost. I think they would have been better off developing a super app for all the various mobile operating systems than thinking that somehow ads exclusively on a Kindle would drive sales. I know of no one who owns a Kindle who buys anything but an occasional book from Amazon. You need to sell a heck of a lot of books to every Kindle user in order to cover your costs. I think it is a failed business model.
- Pridon
  
  Friday, October 26, 2012 - 3:29 pm · Reply
  
  I’ll never understand why they got into the business at all. They could have sold more iPads than Kindle Fires, made its mark up and sold the same amount of books.
- GM
  
  Friday, October 26, 2012 - 5:03 pm · Reply
  
  Dunno but AMZN was up 7% today after earnings last night. AAPL was down 1% today after last nights earnings call. So go figure. Amazon.com has never really shown a profit because they continually plow their earnings back into the company. It’s good to plow money back into your business but they are trading at a very high multiple compared to Apple. But today, if you held Amazon you did quite well. We’ll see how AAPL does next week.
  - Childermass
    
    Friday, October 26, 2012 - 6:44 pm · Reply
    
    Well, it depends.
    Is Amazon a failed business model? Selling stuff below cost to sell more stuff sounds like a ‘yes’ to me.
    Is Amazon a good investment? All ponzis are great until you are the poor bastard who holds the stock when the music stops.
  - Laughing_Boy48
    
    Friday, October 26, 2012 - 8:06 pm · Reply
    
    You got that right. Everyone says that Amazon isn’t making money, profits or whatever. Everyone, that is, except Wall Street. Amazon supposedly missed earnings and yet the share price is up $15 the next day. Apple missed earnings but made billions and plenty more in reserve cash. Apple down $5 after already dropping $95 this month.
    
    Wall Street prefers Amazon selling $199 Kindles to Apple selling $329 iPad minis. Now, why is that even possible? Apple, with supposedly a very solid financial model, is constantly incurring Wall Street’s wrath. Why is it necessary for Apple to maintain high profits but Amazon isn’t. Why does Wall Street feel that Amazon is a better investment than Apple if fundamentals actually matter? Wall Street certainly doesn’t see Amazon as having a failed business model or it would have the same share price as its peers. Somewheres south of $100.
    - GM
      
      Saturday, October 27, 2012 - 2:06 am · Reply
      
      Yup. I’ve seen very few analysts who like Amazon. So I don’t know why the public is buying but they are. But I’d look for it to drop on Monday. Pick up a few Amazon puts Monday morning. I think that $15 will go away quickly. I just hope it goes into AAPL.
- Petey
  
  Saturday, October 27, 2012 - 11:44 am · Reply
  
  So true!
  
  Instead of thee own tablets all they had to do was invest in an amazing app and charge 79 cents for it.
  
  Ironically they would have made more profit than selling the kindle.
  
  Being a business owner myself, basic rules of business is you never sell anything at cost unless all the margin/profit is made on addon products and services associated with that product – e.g Xbox sells at a loss, profit for Microsoft is selling the games and software licences to games developers.
- Mbbm
  
  Saturday, October 27, 2012 - 4:32 pm · Reply
  
  This may seem far-fetched, but give it some thought. I think most Android device manufacturers (including Amazon) depend on the laziness (when it comes to devices) of MOST of their customers as well as content sales. Most people won’t put any real effort into researching (which involves returning devices that don’t maximize usefulness in areas that you care about) which device works best for them. I didn’t include cost because nearly every Android device costs the same thing……next to nothing or just nothing. Most don’t even return Android devices for a better Android device at roughly the same price. Most people would rather bend their needs and wants around a device than buy the device according to their needs/wants. I strongly believe Android device manufacturers know this and are taking advantage of it.
Zulkifli

Friday, October 26, 2012 - 2:54 pm · Reply

The sad part is most likely the iPad mini will be updated in March with A6X chip with retina display …
Together with the Mac Pro
- 1Racer
  
  Friday, October 26, 2012 - 6:24 pm · Reply
  
  It may get a chip upgrade but highly unlikely a display upgrade. To make the mini’s screen retina would require smaller pixels than found in new iPad. Don’t even think about Apple adding another resolution. If margins are tight now, they WILL be nonexistent with a retina screen.
  
  The price point has a nice niche between the bottom feeders Nexus/Fire but close enough to the full size iPad to sway some to customers to purchase the iPad2. I’m interested to see the mini screen next to the iPad2 and new iPad to see the difference. It’d be like comparing a 32″ 780 to a 37″ 780 and a 37″ 1080.
dangcookie

Friday, October 26, 2012 - 2:55 pm · Reply

I, Entitled Consumer, demand that Apple sell the iPad Mini at cost.
Ballmer's left nut

Friday, October 26, 2012 - 2:57 pm · Reply

All you have to do is compare quality of build between the iPad mini and Nexus 7. There’s simply no comparison. One is a plastic encrusted piece of crap akin to the cheapest Dell netbook and the other is a beautifully designed jewel that is a joy to hold and use. Let’s not even delve into the disparity in the number and quality of tablet optimised applications.

The iPad mini is going to be a smash hit with discerning consumers. As for the rest of the Apple hating Android denizens, let them stew in their own crap. We don’t need retards polluting the gene pool.
- ecrabb
  
  Friday, October 26, 2012 - 3:42 pm · Reply
  
  The Nexus 7 really isn’t that bad. The company I work for develops our app for both platforms, so I’ve spent some quality time with it. It’s not as “junky” or “plasticy” as some would have you believe. However, it’s also not as cheap as it seems.
  
  The $199 Nexus that everybody refers to is the 8GB version and is perpetually out of stock. The 16GB version is $249.
  
  So, the Nexus 7 16GB has no rear camera at all, a smaller screen, significantly inferior app quality and selection, and only costs $80 less.
  
  The entry-level iPad mini at $329 really is a bargain by comparison.
mCDIDDY

Friday, October 26, 2012 - 3:41 pm · Reply

There must be a lot of poors out there if they think $329 is a lot of money. If $329 is a lot of money to you…you have no business buying Apple products. You should be worried about clothes, food, a roof, and probably should not be wasting time on the internet bitching about how you can’t afford an iPad.
- darknite
  
  Friday, October 26, 2012 - 3:51 pm · Reply
  
  mCDIDDY, that was crass and uncalled for. With today’s in the toilet economy, (Don’t start with the partisan political crap, go somewhere else for that) $329 IS alot of money.
  
  In a weird way, the down economy has forced some people to re-evaluate cost vs actual value, and that has benefitted Apple as people realize its OK to save a little, pay a little more, and get a whole lot more in return for a quality product.
  - althegeo
    
    Friday, October 26, 2012 - 4:57 pm · Reply
    
    In one 24 hr period, or much less, a lawyer, hooker, car jacker, pan handler, crack dealer, cabbie, cat burglar, antique picker, call girl, pizza deliverer, politician, bar tender, mob hit man or waitress can earn that much and not even declare it on their income taxes.
    
    There are opportunities out there. Get off you ass and go for it.
    - hannahjs
      
      Friday, October 26, 2012 - 5:54 pm · Reply
      
      I saw how you slipped politician into that list.
TheConfuzed1

Friday, October 26, 2012 - 3:43 pm · Reply

If someone buys a Kindle at cost, and torrents their media, Amazon makes nothing.

If someone buys an iPad, and torrents their media, Apple still made a profit on the iPad.

It’s a dirty little secret that no one talks about, but even if it’s less than 10% who do so, that is a significant chunk of the market.
- Tessellator
  
  Friday, October 26, 2012 - 4:48 pm · Reply
  
  I think less than 10% (people who are stealing their content on the bit torrent) is a fair guess for apple iPad owners.
  
  However… Android fans are famous for stealing everything that is not given to them free.
  So, I would guess that the Kindle users stealing their contend could run as much as 25 or even 50% for the Fire.
  - TheConfuzed1
    
    Friday, October 26, 2012 - 5:11 pm · Reply
    
    Actually, you have more precisely articulated the point I was trying to say.
    
    It’s the Kindle buyers that are more likely to pirate, meaning that it only hurts Amazon even more.
Rico

Friday, October 26, 2012 - 4:21 pm · Reply

I really like Kate’s articles but I find it really puzzling why she get’s next to no commentary on her site. Maybe a couple of comments, usually nothing at all. I’ve never understood why…
botvinnik

Friday, October 26, 2012 - 4:31 pm · Reply

hey, where’s that standalone tv for the Christmas season that every dimwit with access to a keyboard and the internet was predicting?…guess that ain’t gonna happen, huh?
- GM
  
  Friday, October 26, 2012 - 4:55 pm · Reply
  
  Have to ask Derek Currie about that. Remember he preached there would be no iPad mini. Constantly! So I’m sure he’s the expert on the Apple ITV or whatever it would be called.
  - darknite
    
    Friday, October 26, 2012 - 5:34 pm · Reply
    
    Your thinking of Gene Munster.
    Full freakin’ stand alone Apple TV since 2009
    - GM
      
      Saturday, October 27, 2012 - 2:55 pm · Reply
      
      No, I’m thinking of Derek Currie. Gene Munster is generally spot on. He has been talking about Apple TV for a long time though, I guess we’ll see next year whether he’s right or wrong. Gene Munster is a knowledgeable analyst. Derek Currie is a useless troll.
vsp

Friday, October 26, 2012 - 5:54 pm · Reply

When the thought process of smart people on Wall Street reach the level of morons, stupidity will be the paragon of virtue and America will be in deep deep shit. It’s happening before our own eyes TODAY and your children will be tomorrow’s beggars of the world. Wall Street’s culture has infected the top leadership echelon of America. Goodbye America, your usefulness and wisdom to the world has ended, by courtesy of Wall Street. Fear will gnaw confidence and the downhill slid to poverty will be confirmed.
leodavinci1

Friday, October 26, 2012 - 6:13 pm · Reply

Another thing is that both companies are also undercutting themselves. Both have their eReader software available for other platforms… like the iPad.

So why do I need to buy a Kindle or Nexus?
amazon lost 28 million, Apple made 8200 million last quarter

Saturday, October 27, 2012 - 1:18 am · Reply

so who’s strategy is better?

(yet this morning, the pundits trash apple’s financial results , while glossing over Amazons as they had done for many quarters — they say Amazon did good because the LOSS was LESS then estimated while Apple’s 8200 million profit was bad because it should have been MORE! : Amazon stock has a PE of 300 vs 15 for apple. This morning apple continued to fall as amazon gained 6%. Makes no sense to me… )
- Mbbm
  
  Saturday, October 27, 2012 - 4:19 pm · Reply
  
  That’s because a bad judgement call on the part of Wallstreet has to be the fault of the manufacturer and a sign of terrible Wallstreet analytical skill.
leakfreeroof

Saturday, October 27, 2012 - 4:28 pm · Reply

Lay them side by side ….. Forget about price and ask yourself which one you like and but it. …… 19 out of 20 times, I iPad mini will be picked until price is revealed ….. Then probably 15 of the 19 would still pick the iPad mini …….

Issue is you can’t see all three at same time so the consumer will get sold you outside influences ….. So now you are probably talking 12 out of 20 will be iPad mini ……

No matter what the mini will be HUGE …..
David Thornton

Saturday, October 27, 2012 - 6:09 pm · Reply

I am really glad that Apple completely ignores everything written about it and just goes on making the best products at a price it wants to sell them for. If you want the best you pay for it. If you don’t you have many other products out there to choose from. I choose Apple every time because I want the best.