Does Apple ‘iPad mini’ face price conflict with iPod touch?

“Apple faces a pricing quandary with its expected iPad Mini,” Patrick Seitz writes for Investor’s Business Daily.

“The new tablet needs to be competitive with low-cost alternatives from Amazon.com and Google, yet also fit into the pricing scheme Apple has established for its regular-sized iPads and its iPod Touch handhelds,” Seitz writes.

MacDailyNews Take: An “iPad mini” should cost more than a tiny screen (7.0-inch) Amazon or Google tablet because it’s worth more.

Seitz writes, “Analysts had speculated that the iPad Mini, which is predicted to have a 7.85-inch display, would retail starting at $299 or less. But that was before Apple on Sept. 12 launched its fifth-generation iPod Touch, which sports a 4-inch display, starting at $299.””

“‘The pricing of the iPod Touch may actually give us a hint of where they’re going to price the (iPad) Mini,’ said Sterne Agee analyst Shaw Wu. “‘It’s a low likelihood that they will price the Mini on par with the Touch or even at a discount. You can forget about a discount. So we’re probably looking at a price above $299.’ Wu’s prediction: $349,” Seitz writes. “Apple’s current model tablets, which have 9.7-inch displays, start at $399 with the iPad 2. The company’s newer, third-generation iPad starts at $499.”

Read more in the full article here.

46 Comments

      1. I was just going to write this very thing, then I refreshed. Analysts and rumor-mongerers are so 2 dimensional. There is a Z-axis you know. You don’t have to operate in only one plane…

      2. The iPad Mini will be Apples own iPod touch killer no matter what, however, what if the iPad Mini has 3G / LTE
        mobility capabilities? That feature will definitely raise the value and price of the new device.

  1. Perhaps this is an indicator that Apple’s handheld product line is already diverse enough.

    Drop iPad 2 but make it exclusive to educational institutions until the iPad 3 can fill the $399 price point.

    1. I don’t know if the iPod Touch is too expensive but I’m with you, the iPad mini needs to start at $299. I trust that Apple has thought about this a little bit. They do a bit of research along with their development. Some of that research is focused on marketing and pricing. I trust that Apple will price the iPad mini perfectly. And it will absolutely kick ass in sales! I just hope it comes sooner rather than later.

      1. The iPad mini would kick ass in sales regardless. The question is whether they want to merely stem the tide of Android 7″ tablets, or destroy it.

        If it’s $349 or $399, they’re stemming the tide. If it’s $299, they’re trying to destroy the Android 7″ market… but it’ll cannibalize regular (and higher margin) iPad sales.

        This all assumes the iPad mini is functionally the same as the regular iPad. It might have fewer features (eg no camera) to justify lower price; or different/new ones to distinguish it from the iPod touch and regular iPad and justify a higher price.

        1. The iPad mini will start at $299 for 16GB Wi-Fi only with $100 increments for every step up in memory. They may restrict it to a 16/32GB model and leave the high end 64GB model to the full size iPad.

          I don’t think they’ll worry too much that the price will overlap the 32GB iPod touch 5th generation base model because the sooner the iPod touch is put to pasture the better.

          The iPod touch is facing declining sales for a reason. It’s overpriced for what it is and no one wants one, especially given its tiny 4″ screen.

          The iPod touch can’t die soon enough for me.

          1. The numbers don’t back your assertions on the iPod touch.

            “iPod line is the one area that continues to see a consistent decline as phones and tablets take over […but…] iPod numbers were actually better than it expected, and the iPod touch continues to be the most popular device in the category far, accounting for more than half of all iPod sales”

            http://www.engadget.com/2012/07/24/apple-q3-2012-hardware-sales-numbers/

            iPods in general are declining for obvious reasons, but killing something that make up over half of a product line’s sales would be on a level of insanity worthy of Nokia.

            Personally I also think the new iPod touches are overpriced when they start at $299, but remember the entry-level iPhone with half the storage actually costs $650 without subsidy, so the touch is less than half the cost of an iPhone.

            1. Well researched.

              The iPod touch is suitable for budget minded parents.
              Its a great gift for those parents who don’t want to buy a cellphone for their kids and hence can avoid unexpected bills.

              As for the form factor and size… it still would make a cool phone… with Viber or Magic Jack and a parents cell number… kids can piggy back the parents cell without any cost to the parent. Only that the device needs a wifi zone.

              Summary,

              The iPod Touch will remain a very strong product for Apple.

    2. Here here! Careful what you wish for Apple. Watering down your product line is not a good thing. Ask Sony, Panasonic, and several others. Value proposition is key and it cannot be debatable.

    1. The new iPod is $299 though. Unless they had a bunch of supply and hoped for it to be gone by the time the iPad Mini came out and will drop the new iPod to $199 and then the iPad Mini will be $299 then.

      1. Yeah… when I go to Apple’s website store where all the products are listed, it shows the iPod Touch starting at $199. However, when I click on the iPod Touch, the next page shows it starting at $299.

        Is it a simple price error… or something else?

        People keep bringing up this “price conflict” with the iPod Touch price, but there’s an even bigger price conflict with the iPad 2. An iPad 2 is the same device, only bigger… while the iPod Touch is really a different device (a glorified mp3 player), but somewhat similar.

        However, it’s possible Apple may drop the iPad 2 if they release an iPad Mini. Of course, they could drop the price of the iPod Touch. Or both.

  2. Wait a second!! The iPhone 5 16GB, off contract, is $649.99 at AT&T. The 3rd generation iPad 16 GB WITH 4G is $629.00. So, why does the author think the iPad mini can’t be less or equal to the iPod Touch???? I think Apple can do whatever the hell they want. We’ll just have to wait and see about the pricing of the iPad mini….

  3. Thats exactly why I haven’t believed all the hype on the iPad Mini coming. The prices just don’t add up or they are going to reduce the iPods, but I highly doubt that.

    1. Oh it’s coming. And will sell like hotcakes. You really doubt that it’s in production? I think you will be pleasantly surprised very soon. I have always believed that Apple this millions of sales by not coming up with the iPad mini shortly after they introduced the original iPad. Think of all of that revenue that hasn’t materialized! But Steve Jobs did not want it. So they did not build it. I’m just glad that he was finally convinced that it was a great idea.

  4. The iPad mini *must* be no more than $249 for me to consider it…and, even at that price, it still might be overpriced.

    Our school district has ubiquitous wireless coverage in all schools, and students are encouraged to bring in their own devices as appropriate. Though I’m a total OS X / iOS household, I’m highly tempted to get a Google Nexus 7 tablet. At $199, it does all of the things that a students *needs* in an environment like that.

    My kids already have an iPod Touch (albeit a 1st-gen device), but I was going to upgrade them to the latest Touch, until I saw that it was $299. WTH, Apple?!? $299 for an iPod? I don’t think so.

    So, for my three kids, I’d have to spend $900 for a stinkin’ iPod for each…and considerably more if the iPad mini is even pricier. That’s not going to happen.

    Sorry – I like Apple’s products, but not so much that I’d drop $900. I can buy a Nexus tablet for each for a total outlay of $600. If Apple can get the iPad mini in at $249, I’d gladly spend the $50 premium over the Nexus…but anything more than that will be the impetus for me to pick up a few Nexus tablets.

    1. I get what you’re saying — price is important — but I don’t agree that a Nexus tablet is in any way similar to an iPad. It’s strictly a consumption device. An iPad (even a mini) can be used for productivity. This is true based on Apple design (the larger size allows true tablet-style apps instead of scaled up phone apps), and the iPad ecosystem (Android has hardly any tablet apps). I’m therefore not so sure that Nexus tablets would do what you want. It depends on your needs.

      I do think Apple’s got a pricing problem, though. I think Amazon’s super-low pricing caught Apple by surprise. There’s evidence that Apple changed their press conference schedule last minute and threw in the iPod announcement along with the iPhone 5, and that makes me wonder if they postponed the mini announcement while they regroup and reevaluate things. The iPod pricing is high — it uses similar high-end components as the iPhone 5 and therefore has a higher price. Will the mini follow suit? If so, $349 seems like the price point, which is high compared to Nexus and Fire. Apple offers more, but many will buy just based on the price.

      1. I don’t disagree that the Nexus and iPad (be it ‘mini’ or ‘full-size’) are somewhat different products…but in school, consumption is often the name of the game. They need to do quick info look-ups, jot down notes, perhaps record a lecture, etc…not edit a video, make a photo montage, etc.

        My kids each have a poly MacBook, so they have a computer on which to create content should the need arise. However, carrying around a notebook/laptop is often overkill…and the form factor of a tablet is ideal.

        That said, I only need the tablet to act as a research tool…and I don’t want to pay too much to get that functionality. Sometimes, the best overall tool (iPad) isn’t the best tool for the job (Nexus).

        1. But what if their educational circumstances change? Like say… they have to start creating content on their tablet devices.

          Also, having just an iPad is far less expensive than having MacBook, let alone having a MacBook AND a tablet of any kind. Do they really need those MacBooks? Sell them. There is likely to be little that your kids can do on a MacBook that they couldn’t do on just an iPad.

          1. Excellent point…and I had considered it (well, considered it for some of them). A key item to consider is that I’m the network engineer for the school district, and I work with the curriculum department planning on future implementation initiatives, and I know there’s no drive to *require* anything like content creation in the near future.

            As for the kids, one of the three prefers her laptop over anything else, and only wants a tablet for the convenience…and would likely be OK if she had no tablet at all. She’s graduating at the end of this school year and has a brand-new MacBook Pro…so she has all the horsepower she really needs.

            Another is also graduating at the end of this school year and has already enlisted in the USAF…so she can buy whatever she wants when she’s she’s earning a steady paycheck. 🙂 She would only need a tablet for the remainder of this school year. She takes her MacBook most days, but complains about lugging it around.

            The last one, though, is a sophomore and has a few more years. She’s always received the tech “hand-me-downs”, which is why she has the oldest MacBook in the bunch. She’d be thrilled just to get something new, and I would be happy to get her an iPad, but that would lead to the inevitable complaining from one of the others about it not being fair.

            So, if I can get by with only having to spend $400-$600 for 2-3 tablets this year…then getting the youngest a used iPad (or new one, depending on prices) in a year, that’d be OK…but there’s no way I’ll buy 3 iPads at $350+ each this year. I would, however, bite the bullet if they were only $249 (or, better yet, $199).

      2. You bring up some very good points. But in the end I have to believe that Apple knew what Amazon would price their tablets at. If Apple’s secrets can be found so too can Amazon’s. But you are correct, the pricing is going to be very tricky. It seems to me that $299 would be the maximum starting point. $249 would be ideal. Apple needs to maintain decent margins. And let’s face it, people will pay a little more for an Apple product. In the end, I believe that Apple was not surprised by any pricing from Amazon.

      1. Dude – we have several of those Nexus tablets that have been in testing in the school system for a while, and none have had a problem. You’re being quite dismissive with your “Bye, bye” comment, and obviously have nothing to add to the conversation. Objectivity is something you’re sorely lacking.

        Don’t get me wrong – 99% of the time, I’ll buy an Apple product over anything else, even when (as is often the case) the Apple product is more expensive. Apple builds a quality product and is second-to-none in that regard. Heck, I’ve even told friends/family that I’ll refuse to give them tech support unless they buy a Mac (I’ve got better things to do with my time than to clean malware 24/7). But there’s no value in a $300/$350 iPad mini over a $199 Nexus for what my kids need in school. Sorry, but there just isn’t.

    2. definitely 16GB for $249…Google is already talking about a $99 version of the Nexus.

      The Touch is overpriced $199 for 32GB or 64GB would be much better…

      I bought a Nexus 7 for portability…I do like the smaller form factor. However, I find myself always going back to my 3rd generation. Even with Jelly Bean the OS on the Google tablet feels half baked.

  5. The $299 IPod touch is 32GB, The mini will be $299 for 16GB ($399 for 32GB, and $499 for 64GB). The iPad 2 is $399 for 16GB. There, the problem is solved, it all works.

    1. I like this pricing and think you are correct. Apple is not going to let them have the low end market. The mini will be a gateway drug for most users to the wonderful world of Apple’s ecosystem. And an easy upgrade/addition for current iPod touch users.

  6. So, Investor’s Business Daily felt the need to write a story saying they believe the iPad mini will cost more than the iPod touch?

    Lets not go out on a limb here guys.

Reader Feedback

This site uses Akismet to reduce spam. Learn how your comment data is processed.