Why Apple should price’ iPad mini’ at $199

“As the rumored unveiling date for the iPad Mini steadily approaches – October 23 to be exact – speculation and rumors over Apple’s pricing plan for the product continue to pile up,” Yoni Heisler writes for Network World. “Now the iPad Mini, by virtue of its size alone, will be positioned to compete against smaller tablets like the Google Nexus 7 and the Amazon Kindle Fire. That being the case, Apple’s iPad Mini should be priced rather aggressively. Keep in mind that the Nexus 7 retails for $199 while the base-level Kindle Fire is about $40 cheaper.”

Heisler writes, “Some analysts believe Apple will go all out and disrupt the low-end tablet market with an aggressive pricepoint in the $199 range. Still, others believe that Apple, always keen on maximizing its profits, will price the device in the $250 range… I contend that there really is no pricing confusion to be had with the iPad Mini and the iPod Touch as they are two different products that serve two different purposes. The iPad Mini is a miniaturized tablet meant for mild media consumption and book reading. And as opposed to the iPod Touch, it won’t feature a crisp Retina Display or high-quality camera.”

“Tthere are a whole lot of people who want to get their hands on an Apple iPad but are simply priced out of the market under Apple’s current pricing matrix,” Heisler writes. “Right now, those folks are becoming Amazon and Android-based tablet users. Apple wants to avoid this dynamic at all costs and we imagine the highest Apple would price the iPad Mini is at $250. Unleashing an iPad Mini at $199, though, would really leave the competitors like Amazon and Google scrambling to stay afloat.”

Read more in the full article here.

MacDailyNews Take: Yes. Unlike the last time around, Apple would be wise not to allow Android (or Amazon’s bastardized Android platform) get a toe-hold in the market. Apple has the money and this is an excellent example of the why the war chest exists – plus, once you get the vast majority of users on iOS iPads, they’ll naturally want their smartphones to match, so they can integrate all of their devices with iCloud. As those two-year contracts end, Android settlers will move to iPhones to match their iPads.

If Apple does this, expect some gnashing of teeth and rending of garments among certain “analysts” over margins, regardless of how many times or how clearly Apple CFO Oppenheimer and CEO Cook explain their rationale.

Apple announced shockingly low prices with iPad. With that came market domination. They’d be smart to do the same with iPad mini.

[Thanks to MacDailyNews Reader “Fred Mertz” for the heads up.]

44 Comments

  1. Agreed. A starting price point of $199 would completely relegate the 7″ Android tablets to a niche market permanently. Here’s hoping Apple is able/willing to do this.

    1. I’d love to see Jeff Bezos cheery smile turned into a frown. A $199 iPad Mini would do just that, but Apple wouldn’t go to $199 unless it wasn’t selling that well. At $250, it will certainly sell like hotcakes. I’m sure the iPad Mini refurbs will turn up shortly for $199 and that’s good enough.

      I’m getting fed up of hearing how Amazon is going to put Apple out of business because Amazon is selling cheaper tablets. Hasn’t anyone heard that businesses can’t make money if all they’re going to do is give things away? If Apple can only break even on media content, then I’m sure Amazon has the same problem. So, this theory that Amazon can sell tablets at cost and make it up with content really doesn’t hold water.

    2. These $199 and $159 pretenders are not iPads, especially the base-level Kindle Fire. Apple is not desperate like its competitors, nor is Apple subsidizing its hardware via search (Google) or media (amazon). The iPad mini will be a premium Apple product with a better and larger display than the Nexus. If it is priced as low as $249, then everyone should be thrilled. But $299 seems more likely unless Apple cuts corners with memory.

    1. I don’t…

      Not that I want to pay more money for it (I’m not crazy) But, let me be clear (Apple) I don’t want kindle fire like crapolla (or samsung flexi-plastic piece of crap) with an Apple logo on it that runs iOS.

      What I want a small iPad (same build quality, just a bit smaller) and am willing to pay for it.

    1. Yeah, I just dont understand this comment. No camera??? to not have a camera is not only saying “our technology isnt there to handle this” …which it is! or it says “wait to buy v2 when we put it in there” which should make people kind of upset. I can understand if this is a new product and their testing the waters…but iOS has shown it sells…they dont need to wait for a v2 to put a camera in there. what are you smokin?

  2. I find that hard to except when the iPod touch starts at 299, iPod has a A5 chip and since the iPad would go lower than that I can’t see why it would be cheaper I would guess they would put the A6 in the new iPad why go back right? The iPhone five alone cost like $207 for Apple to manufacture or something like that I know that’s not exactly right but I cannot see the iPad being any cheaper for them to make and sends it wouldn’t be subsidized by a cell phone company how the heck can they put it out there for 199.

  3. The Nexus7 at $199 results in $0 of profit. Apple doesn’t need to do that, and it’s not their style. An iPad mini starting at $249 will dominate the 7-8″ tablet market.

    1. Yes, the iPad was priced at $499 and was a huge surprise to the industry, yet within months, there were people yelling that it was too expensive for just a plain slab when you could buy a Windows netbook for $350. Now there are idiots yelling that a $199 tablet is the absolute sweet spot for a tablet and anything more is just a rip-off. That’s how it is. Cheapskates are never satisfied. They must have cheap junk.

    2. Only because the iPad was totally not the traditional desktop/laptop computer in tablet form, like people were expecting. As such, components were cheaper in many ways (no USB or other connectivity other than wifi and cable; thinner = less material costs; etc)

  4. What if Apple has a built in remote control inferred in the iPad mini? Put a Thunderbolt input from your cable box on a iOS6 based Mac mini and you have the world’s best HDTV system. No deals to work out either. Would the iPad mini not be the greatest game control / remote on the planet with a little SIRI in it to? Media suppliers can offer apps to their media content.

      1. And Apple’s profit and long term customer ratio with my family changes very little between those 3 options, and is probably better at $299. So why drop down to $199? Marketshare. 😉

  5. If the iPod touch is $ 299 at 32 GB, what makes some of you think a machine with a lot more screen space will start at $ 199.

    Lay off the sauce for a while and set aside an extra hundred or two for the devices you really want.

    1. How can we be sure that it won’t be available with 16GB (or even 8GB) on the low end? And the screen may not be Retina, which would also bring Apple’s cost down.

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