“Apple watcher Ryan Jones, who blogs at IAmConcise, has an interesting graphical argument for a smaller, less expensive iPad. In his post today, The Reason for the iPad Mini, Jones refers to Tim Cook’s recent statement that Apple will ‘one thing we’ll make sure is that we don’t leave a price umbrella for people’ in the tablet space,” Anthony Wing Kosner writes for Forbes. “A price umbrella is the cover that a market leader provides other companies by establishing a premium price for their products. Competitors can enter the market at lower price points and disrupt the leader’s dominance, in Jones words, ‘from the bottom up.'”
“Apple has effectively defended itself from bottom up competition twice before, Jones points out, with the iPod and iPhone,” Kosner writes. “In the case of the iPod, it filled the bottom niche with the Nano and Shuffle. With the iPhone, Apple has been able to get the price down to $0 by continuing to sell the 3GS with its $400 price tag fully subsidized by the carriers.”
Kosner writes, “Jones makes his point by charting every current model of iPhone, iPod, and iPad by price (see above). It’s a very compelling visualization because he lets the data—the missing triangle in the iPad cluster—make his argument for him.”
Read more in the full article here.
Related articles:
The iPad mini: Why now is the perfect time for a small Apple tablet – July 19, 2012
NYT: Apple developing 7.85-inch iPad to be announced this year – July 15, 2012
Bloomberg: Apple preps smaller iPad, sources say – July 5, 2012
WSJ: Apple’s ‘iPad mini’ launch nears – July 5, 2012
After 11 straight iOS device purchases Nexus 7 has certainly disrupted my purchase pattern. Apple has a challenge here.
Nah. Kindle Fire and the Nook have a challenge as well s Googles’ own partners. Google had to take their partners profits to get people to buy android tablets which is a pretty sad state of affairs.
Apple will come out with a 7 inch iPad at a competitive price yet be a much more capable, better built, and better supported device.
You can’t compare a bare bones 7″ Android tablet with minimal capability to a 10 inch iPad.
Good luck with that. You just bought a device that cannot run any of the iOS apps that you have purchased or downloaded for free over the last few years. And you bought it just a few months too early – just before the real mini-iPad from Apple.
So what was it that impressed you, David? Was it the missing 4G capability? The long charge times? The slower performance of the Nexus 7? The puny–and unexpandable–8GB storage capacity? Or perhaps it was the lack of a rear-facing camera?
This is the first time I’ve really believed. apple will put out the small iPad – and not because of a leak, but because of the Inarguable logic of e article and Cook’s “price umbrella” statement.
Sorry about typos. Should say: this is the first time I’ve really believed Apple will put out the small iPad – and not because of a leak, but because of the unarguable logic of the article and Cook’s “price umbrella” statement.
Apple has been pretty successful offering premium priced computers. It can be argued that they may remain successful offering premium priced tablets. Perhaps apple doesn’t want to enter the $199 price game.
Apples biggest concern is the cannibalization effect that a quality $199 iPad will have. Likely it would do more harm to Apple’s current iPad product offering and profits, than competitors cheap assed $199 tablet will.
I say let the bottom feeders feed. Remain focused on providing premium products with profit margin.
If Apple doesn’t cannibalize their larger iPads, Google et al. will be more than happy to. I also don’t think Apple has to hit the $200 mark to thwart the 7″ tablet onslaught (okay, there doesn’t seem to be an appreciable market for the 7″ tablet, but Apple can easily create and then dominate it). Anything south of $300 ought to do it.
There will be an appreciable market once Apple comes out with its mini iPad.
When Jobs was at Apple, the thought was it was better to cannibalize your own products than have someone else do it for you. I’m sure that was not Jobs simply ramming home that thought, since the classic example was something he opposed initially (iPod mini).
Show an example of Apple cannibalising it’s own products by offering cheaper models. People hand down or sell on their old iPhones, they will often buy an iPod Nano, or Suffle, then move up to a Classic or Touch, or go the other way, wanting a smaller version for work or travel or sport. Same with the Pad; I have a 64Gb iPad, which I love to bits, and an iPhone 4, soon to be upgraded, but the Pad is too big for day to day carry, and I find the phone screen often too small, so a 7.85″ iPad would be perfect, small enough to throw into a bag, or a jacket pocket, and be perfect for copying photos to with an EyeFi card, for reading ebooks, and for mapping purposes.
I honestly can’t see a downside to a smaller Pad, and I’m sure many people put off by the size or cost of the current device would flock to buy a smaller, cheaper version.
And would be perfect for hospital-based medical professionals. The iPad is too big to be put into a lab coat pocket. A 7 inch tablet fits just right. 7 inches always seems to be the preferred size in life. 😉
Wow, I hadn’t thought of it that way. Now it makes sense.
I’m not sure the “coat pocket” market is really large enough for Apple to have a reason to pursue a 7″-ish iPad mini.
Also, in the specific example you provide, is pocket fit really going to win out over more screen real estate for reading charts or imaging results? I suspect not.
i have an iPad 2 but a nexus 7 will do almost everything I do with my iPad. For my second tablet I need something just for kindle and a few other basic apps
Why spend $500 on another iPad when I can buy something for $200
You need a second tablet for Kindle?
You can’t get Kindle books on your iPad?
my wife stole my ipad for the kid educational apps for the baby. if i’m going to get a new tablet mostly for reading, and a few other basic things it’s kindle fire or N7.
why spend $300 more for features i won’t use? i already have an iphone 4S anyway if i want to play a crazy game
it’s too heavy
Why are all of you so delusional? You are so brainwashed by the media and the hype inherent in it.
Why is the Nexus 7 cause for concern for Apple? How many devices are actually selling? Is the product any good? Have you used it? Do you realize that every other tablet has pretty much failed except the iPad? That is, that none of them have proven to generate any sustained sales or profit. Why does a tweener make any sense? How is it any better than a smartphone?
I own a Nexus 7, and it sucks. Tweeners are a waste of time. It’ll meet the same fate as the Kindle Fire: initial sales on hype then boom: dead after 2 months. NOBODY NEEDS THIS.
All the rumours are just that: rumours… disinformation from Apple to confuse its competitors. APPLE WILL NOT RELEASE A MINI.
You ask a bunch of questions from a perspective of someone who has not used a Nexus 7 and then follow it all up by saying you have one, and it sucks.
lol I think you have some valid questions but I don’t believe for a moment you have a Nexus 7.
I have used a Nexus 7 and I’ll admit I have not used one long enough to determine if the form factor is something that would really work for me. I have used it long enough to comment on how it feels and compared to any other android tablet I’ve touched this thing hits the mark. Its fluid and very responsive. Not what I was expecting honestly.
I don’t know if its a threat to the iPad and I want them both personally. So maybe its a different class of tablet device vs a competitor. If Apple makes an iPad mini i’m sure it will sell if the 7ish inch form factor is a good one.
It does bring up one other concern… if google were to make a Nexus 10 and it ran as smooth as the Nexus 7 would apple need to be concerned? I don’t know but they have to be thinking about it down in Cupertino.
Apple will sell millions of 7″ iPads for kids of all sizes and ages.
7″ iPads work without the sandpaper in the hands of a child on Christmas Day.
Get a clue.
> I own a Nexus 7, and it sucks
You lie.
I agree completely and also doubt that Apple would produce a product that fits between the IPod Touch and the iPad for the same price as the iPod Toich. $200 won’t cut it for the fabled iPad Mini which would have the same guts as the iPod Touch and then some.
Even at $200, Apple also has to support iCloud for it.
I want my Newton !
I have my Newton, but don’t use it anymore.
The thing with the compititor tablet is that what about their content and user experience, we know for a fact that the compitition is badly lacking in the eco system dept and which is why HP tablet went down the toilet and the others are not doing well. Who ever buys the cheap non apple tablets are poor people with no budget who are not worth chasing by apple, let the miserable compitition serve them
Yo Snoop, spelling matters. Oh and by the way, nice attitude.
Doesn’t matter, he or she got the point across very well.
And yea, a very nice attitude!
The HP tablet didn’t go down the toilet on merit–shortly after its debut it was killed by the incoming CEO, before the free market could determine the victor. That CEO almost axed their PC division too, and was deemed so bad the board fired him less than a year later.
Poor people do not spend money on a tablet. Poor people worry about how they will feed their family, and whether they will have a roof over their head. I’m pretty sure they are not worried about a meaningless gadget in the grand scheme of things.
Big difference between poor and someone who doesn’t want to spend a lot on a tablet.
They can be poor people, they want an ipad really bad but cannot afford it, so they buy cheaper stuff like Archos tablets and pretend they got a bargain and better value. I also see poor people who cannot afford macs buy cheaper windows,laptops and then moan that macs are expensive and not worth the value. Also, the ecosystem of apple,s compitition is not excellent, so that alone makes apple safe and not needing to down grade or react to the compitition. Good luck to the google tablets, lets see what happens
Poor people don’t buy tablets.They buy lottery tickets.
Ha, I was thinking kind of the same thing. This guy doesn’t know anything about poor people if he thinks they stick to buying only essentials.
OK… Wile some of the feedback on here reads like a novel,the reality is a simple one in that an Apple Google thermo nuclear war will benefit all of us. I do not give a cat’s meow about a companies profits and why would anyone ever celebrate this is beyond me as profits are crystallized by us being so foolish to pay such high prices for gadgets.
The lay of the land will look very different in the next 12 to 18 months as economic bubbles will be busting on all continents and gadget sales will be negatively affected across the entire spectrum. I do like the fact that Google will be forcing prices to come down and margins to do the same and the real winners will be the consumer.
“I do not give a cat’s meow about a companies profits and why would anyone ever celebrate this is beyond me”
Well as someone who has started 3 companies, I will give you a simple analogy. Can you breath without oxygen, will you die without drinking water, can you drive your car without gasoline, hope you get my point.
Profit is the oxygen, the water, the gasoline that allows me to be able to create things that you need to buy.
Can’t make it any simpler for you.
Re: small iPad: maybe some of us can more easily use a form factor larger than an iPhone, smaller than a full size iPad.
Who better than Apple to do it?
Why make this issue so complicated, why overanalyze it like some of you are doing?
From my perspective, the issue is not whether Apple could produce a best in class 7″ tablet. It’s that it seems to be chasing a fairly small (no pun intended) market and by going with a screen size they have in that past said compromises user experience. The bottom line of Apple’s approach is user experience.
With regard to the pricing umbrella, this hole could be filled by pricing the iPad 2 at $199-250. This might be possible with a combination of decreased production cost (which is likely the longer they make it) and decreased margin.
Okay to be fair Steve said 7″ tablets would be dead on arrival, the proposed 7.85 tablet from Apple will have 40% more screen real estate then it’s 7″ counterparts.
This may help you understand better.
Link:http://www.macrumors.com/2012/07/10/why-apples-7-85-inch-ipad-mini-isnt-a-7-inch-tablet/
Don’t worry folks, the Nexus 7 is a bigger POS than the Fire…just Google “Nexus 7 Issues” and happy reading, if you can get through all the manufacturing defects in the next few hours!
Apple’s will sell for $239 or $249 at 7.85 inches ……. They won’t match the $200 price but $239 is not too much of a stretch …..
iPod Touch goes to $179 …
Honest, it’s iPod touch, with a lower case “t”. So why not built a bigger iPod Touch.
it doesn’t matter what they call it. Don’t get hung up on names
You have all forgotten the mobile search numbers posted by Apple devices. If you think Apple will give up it’s strangle hold on those search numbers to thwart google… Think again.., not only will they introduce a 7 inch fo tablet… It will have Siri… Google will be bleeding money trying to get into the mobile market in a significant way, all the while dealing it’s ad revenue shrink… This is a no brained for Apple with NO downside…..add their recent entry into education publishing and the less expensive 7 inch format seals the gate of anyone trying to displace them in that key market.
I will by one at $249 simply because it is easier to carry around than a full size iPad. No more complicated than that.
Good call, I do allot of work on my iPad, but having a 7.85″ mini will just give me another option as what size device I would like to use given the task needed for that day.
I never even had given another device a thought, I have tried and tested many, none can compare to the smooth operation and quality Applications that Apple offers.
Agreed. Also there’s a lot of people wanting to use 7 inch tablets for automotive use. That, and kids, games, etc a smaller iPad should do well.
I see this argument as compelling but not conclusive. The iPhone and the iPod employed two different strategies for “filling the triangle”. The iPod filled it by extending the lineup to the low end with new products, and the iPhone did it with old products. The iPad could go either way.
If Apple takes the iPad to the lower end the way they did with the iPhone then instead of an iPad mini we’ll see an iPad 4, and all the older devices will drop in price to fill the gap toward zero.
That’s why the iPad 2 continues to be for sale at the starting price of $399, $100 lower than the starting price of the New iPad [3].
iPad 2 From $399
iPad Mini blahblahblah 7″ blahblahblah
I have yet to EVER see a market plan for the iPad ‘Mini’ that makes any sense. All anyone writes is a personal desire for it due to some abstract reasoning that doesn’t translate into a universal need.
Nothing (so far) sells well in that space except plain old cheap ebook readers. The iPad is NOT in the ebook reader market. It is lightyears beyond them in capability.
Nothing (so far) has made any profit in that space except plain old cheap ebook readers. The iPad ‘Mini’ would be significantly more expensive specifically because it is lightyears beyond them in capability. No fracking way is Apple going to sell a $199 ~7″ iPad and go into hock over it just to have the POS on the market. Google, on the other hand, as well as Amazon, are happy to sell their devices at a lost so they can BUY MARKETSHARE. Apple doesn’t stoop to dumbass market scamming a la Microsoft. Apple doesn’t need to market scam.
The iPad ‘Mini’ continues to be, IMHO, a stupid rumor that achieves nothing more than luring suckers onto the reef where they can be smashed and looted. Meanwhile, Apple literally owns the the nearby port of safe haven. No crashing on the rocks for their customers, thanks.
Check out the graphics at the source article. For some reason the author is going all hyper because there is a triangular space below the current iPad offerings.
Look above the iPad and notice the iPod Touch. How about moving those iPod Touch lines right down to below the iPad lines?! Notice how iPod Touch fills in that space so very nicely? That’s because the iPod Touch already removes the so called ‘umbrella’ effect. The iPod Touch IS the ‘iPad Mini’, according to this argument. Case solved. 💡
ipod shuffle
the absolutely most worthless ipod ever. but its cheap and people bought it for their kids
Actually, I have it in my bag for those emergencies when my iPod Touch and its ancillary battery are dead. I keep a completely different playlist on it, making it a fun emergency resolution. 😉
It’s about making great products first – price umbrella is no excuse to release a lousy product.
If Apple made a smaller & cheaper iPad (which they won’t), people would have to choose, and majority of people would want pick the smaller one, because it’s cheaper, easier to carry, easier for traveling, etc.
But then something strange happens – they start to use it, and it sucks. They read a PDF – and they have to zoom in and out and scroll to see everything on a document meant for the print on 7″ screen. They go on the web – full size websites are too big for the screen, mobile websites are too small. They have to hold it in landscape to get most websites layouts to fit and be somewhat readable, but they have scroll constantly because of short landscape view makes each page. They go to install apps – regular iPad apps are not compatible (or miniaturized to unreadable levels), iPhone apps are too small, iPad Mini Apps are few and far between – developers seem to think they can make more money focusing on the iPad and iPhone cash cows, and drag there feet when it comes to supporting a new, unproven, much smaller iPad Mini market, that doesn’t offer the potential of being able to do anything new.
So there you have it – the consumer gets screwed, by Apple. The consumer was shopping by price and size, and ended up getting a much less usable and less satisfying product than a regular iPad. And Apple, in this hypothetical situation, ignored there own extensive usability testing, and decided to sell an inferior product that competes with and undercuts the iPad, the most usable computer ever built.
They said the same thing when the Kindle Fire launched. Remember, it too had wonderful initial sales #s, and then…
Just like how Apple started selling netbooks to compete with all of the low end, small, cheap PCs all of the PC vendors were selling . . . oh, wait, that didn’t happen either.
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