Editorial by Andrew Kameka on Wednesday October 24, 2012.
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Apple introduced a smaller iPad that costs less money than the standard version that has a 9.7-inch screen, but the new product still costs significantly more than comparable devices from Amazon and Google. Despite expectations that Apple would try to compete with the Amazon Kindle Fire and Google Nexus 7 for dominance among smaller tablets, the iPad Mini costs $129 more than its rivals. Is that too much money to ask?
No, says Apple marketing chief Phil Schiller. Despite rumors that the iPad Mini would sell for a price closer to that of the Kindle Fire and Nexus 7, perhaps in the $249 range, Apple elected to price the device at only $70 cheaper than the iPad 2. It's a conservative pricing strategy meant to maximize profits, not an aggressive push to tighten its grip on the tablet market. Schiller told Reuters:
"The most affordable product we've made so far was $399 and people were choosing that over those other devices. And now you can get a device that's even more affordable at $329 in this great new form, and I think a lot of customers are going to be very excited about that."
At $329, the "affordability" of the iPad Mini as it relates to other sub-8-inch tablets, not other iPad's, is a losing argument for Apple. A consumer could purchase a Nexus 7 or Kindle Fire HD and still have nearly $100 to put towards purchasing books, apps, movies, and other accessories. There's simply no denying that the iPad Mini is expensive in its class of devices. The question, therefore, should be "Is the iPad Mini worth the added cost?"
The iPad Mini forces customers to pay a premium, and it's a justifiable premium for many consumers. While Amazon and Google offer more affordable devices, Apple offers a more complete ecosystem. Apple has more than 700,000 apps, 275,000 of which are made specifically for the iPad, and 1.5 million books. Amazon has a larger eBook library, but it falls well short on the app front with only 50,000 apps available. While the Android ecosystem has increased tremendously, it has stalled on the tablet front. The amount of tablet-specific apps, or at least apps that utilize the Android fragment framework that lets developers reformat their apps to take advantage of more screen space, pales in comparison to the available choices for the iPad Mini. Plenty of phone apps scale effectively to the larger screen size, but that doesn't deliver the same experience. Causing further harm to the Nexus 7's case is the fact that it simply cannot muster the same amount of books, music, and movie options available in iTunes unless the user is in the United States.
Apple's product costs more than that of Amazon and Google, and that's perfectly fine. The iPad Mini justifies the added costs in many consumers' minds. Many others will turn away because having a rear camera on a tablet or more app options will not be enough to justify spending more money. Those customers can buy a Nexus 7 and be perfectly happy. Others might find that the Nexus 7 isn't quite what they're looking for, and a $329 price tag won't stop them from getting the product that best meets their needs.
If Apple's intention is to prevent Amazon and Google from cornering the smaller tablet market, the iPad Mini is too expensive to have enough sales necessary to achieve that goal. However, if Apple's intention is to find a way to attract buyers looking for a smaller tablet or those who don't want to spend $499 for a new iPad, a $329 iPad Mini will be more than reasonable. It's only too expensive if no one is willing to buy it, and I doubt Apple will have that problem when the iPad Mini pre-order period starts this Friday.
Andrew is based in Miami, Florida.