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At $299 for an iPad, how many people would really buy the iPod touch?

One fits in your pocket, the other does not. They aren't simply interchangeable products.

An off-contract iPhone costs almost the same as the comparable cellular model iPad. Apple doesn't seem to care about that.

The 13" MacBook Pro and 13" MacBook Air cost exactly the same. They're even closer in form factor than the iPod touch and iPad mini. They have different trade offs.
 
I have a feeling that the iPad will get smaller and iPhones and iPod touches will get larger until they reach a common size and perhaps get merged into a single iOS device with all the functionalities.
 
I understand the logic, but respectfully disagree. These are different product lines. One fits in your pocket, the other one doesn't. As others have mentioned, more work is required to get essentially the same components to fit in a smaller space. One has a retina display (the iPod) the other won't (the iPad Mini). It's comparing apples and oranges, and there's just as much reason to believe that Apple will low-ball the price to compete with the Kindle Fire.

Many disagree with me (which I understand, it's just my personal opinion), but I believe Apple will price the entry-level iPad Mini at $199 for a simple reason - they want to compete with the sub-$200 Kindle Fire and draw new customers into their ecosystem. They can sell models with increased storage and LTE support for $300-$600 and bank on those for a higher profit margin, but the $199 model (again, my personal opinion) would be geared towards introducing new customers into the Apple community with a lower profit margin.

For those new customers, the iPad Mini might be their only Apple product. They may own an Android phone and a Windows PC. But Apple is hoping that once they get their hands on an iPad and start buying apps, music, and books through iTunes and the App Store, that their next phone will be an iPhone, and maybe their next computer will be a Mac.

Amazon uses this same logic with the pricing of their Kindles. They don't make bank on the tablets, they make bank on the content. Apple doesn't have to do this across the board with their products, but it would be smart to do it at the entry level to draw in new users.

My 2 bits.

I find your argument compelling. A sub-$200 mini could attract a lot of first-time Apple customers of all ages. And once you go Mac, you never go back.
 
* Inferior camera and probably front face-time VGA camera only
* A5 chip
* 8-16GB storage only
* non-retina display
= 249-299$

If more = no one will buy it. This product has to compete with Kindle Fire and Google Nexus 7 tablets, so it has to be cheap. Anything more pricey than 299$ will ruin this strategy. If speced as I predict it will be priced same as iPod touch, but it's gonna be inferior to touch in terms of camera, display resolution, speed, mobility, and price/storage ratio. So no I don't believe they will canibalize each other. iPad Mini will not be for current iPad users. It'll be aimed at people who couldn't afford iPad2 and iPad3, and was looking for Kindle or Asus tablets. Apple now wants to strike this market with a cheaper inferior tablet. For current iPad users it'll probably be boring and crappy, but it's designed for different target who can't afford 399$+ tablet.
 
but it's designed for different target who can't afford 399$+ tablet.

Apple sells their goods to people who can afford their price not the other way around. ;)

They are in business to make as much money from their gravy train.
 
Apple sells their goods to people who can afford their price not the other way around. ;)

They are in business to make as much money from their gravy train.
If that was to be true there's no sense for iPad mini existanse at all. Mini has to be significantly cheaper than The New iPad. It means well below 399$. Otherwise people will buy regular big iPad, others will get nexus or samsung or asus tablet. Once again if its 300-400$ people will ignore it and get the 9'' iPad 3 for the same or very similar price (New iPad starts at 399$).
 
If that was to be true there's no sense for iPad mini existanse at all. Mini has to be significantly cheaper than The New iPad. It means well below 399$. Otherwise people will buy regular big iPad, others will get nexus or samsung or asus tablet. Once again if its 300-400$ people will ignore it and get the 9'' iPad 3 for the same or very similar price (New iPad starts at 399$).

Apparently, from reading the various posts on this forum over the past 2 years, there's a pent-up demand for a smaller format tablet. If that's the case then a 7" iPad will satisfy that demand. "Smaller iPad" however, doesn't automatically mean "smaller iPad priced at Google Nexus levels." So it's conceivable that there's a market out there for "same features but smaller" at a price a bit below the current pricing.

The $199-$249 pricing fantasy won't happen.
 
Apparently, from reading the various posts on this forum over the past 2 years, there's a pent-up demand for a smaller format tablet. If that's the case then a 7" iPad will satisfy that demand. "Smaller iPad" however, doesn't automatically mean "smaller iPad priced at Google Nexus levels." So it's conceivable that there's a market out there for "same features but smaller" at a price a bit below the current pricing.
That's a crazy scenario to canibalize two iPad formats with each other... For this reason Apple won't make same iPad with just a smaller screen.

The $199-$249 pricing fantasy won't happen.
It will and it's not a fantasy for 7" non-retina tablet with 8gb of storage and some crappy facetime camera. Just don't expect full featured same quality hardware and features as iPad 3 at 200-300$... Of course that won't happen, but cheap lesser-qaulity and features iPad Mini priced significantly lower than current gen is something very much possible. But of course only time will tell :)
 
Why?

Because of this:
new-ipod-touch-lineup.jpeg


No way an iPad Mini will cost less than an iPod Touch (5th Gen).

It'll be $299. Then people will have to decide do they want a pocketable device or a tablet for the same amount of money?
 
It'll be $299. Then people will have to decide do they want a pocketable device or a tablet for the same amount of money?
Exactly, not to mention iPod touch at the same price will have a retina display and 32gb of storage, while iPad Mini will probably have 8gb and non-retina so that both of these devices will not canibalize each other.
 
I could care less what it costs as long as it's under $400 AND NO LARGER than a Nexus 7. Nuff said
I was going to say the exact same thing!

I know people out here obsess about protecting Apples profit margins and lose sleep over one product cannibalizing sales of another, but im a selfish consumer who only cares about what I want. And what I want is a sub $400 7" iPad in all Black.
 
I was going to say the exact same thing!

I know people out here obsess about protecting Apples profit margins and lose sleep over one product cannibalizing sales of another, but im a selfish consumer who only cares about what I want. And what I want is a sub $400 7" iPad in all Black.

Apple doesn't care about what you want. They tell you want you want.
 
Apple doesn't care about what you want. They tell you want you want.
True to some point, but... They also care for their current products. There's no way iPad 3 (and it's upcoming successor) won't be affected/canibalized if Apple relase iPad Mini at the comparable price with same functionality and interiors. The only way for them to success and not canibalize current 9,7" iPad is to release a tablet with not only smaller screen, but also less impressive hardware to make a difference in price points, and at the same time to strike at the cheap tablets competition. Any other strategy is pretty much useless.

Besides, there are already reports of factories started making iPads mini with non-retina displays. This suggests that mini will indeed be lesser hardware-wise to iPad 3. It means the price must be reduced significantly. I know a lot of you dream about iPad 3 or 4 only with smaller screen, but that won't happen.
 
It will and it's not a fantasy for 7" non-retina tablet with 8gb of storage and some crappy facetime camera. Just don't expect full featured same quality hardware and features as iPad 3 at 200-300$... Of course that won't happen, but cheap lesser-qaulity and features iPad Mini priced significantly lower than current gen is something very much possible. But of course only time will tell :)

Hell, it's possible to make it with a cardboard enclosure and monochrome display for <$100, but that doesn't make it a good business move. There's next to NO upside for Apple to compete at $199-$249.
 
Hello. Just my $0.02 on the issue. I don't think the pricing on the iPod Touch is relevant. I think that Apple with phase out the iPod Touch after the release of the iPod Mini.

The iPod Touch evolved as an alternative to the iPhone for people who didn't want to pay a monthly charge, but still wanted to run iPhone apps or surf the net. Remember Smartphones weren't as common then as they are now.

The iPad has probably cut into a significant part of that market. The iPad mini will cut into even more of that.

I don't expect Apple to cut the iPod Touch as long as sales and profits are good. But I expect it to go the same way as the 17" MacBook Pro.

After using a tablet, the iPod Touch looks really small. Yes, I'm sure there are people who would still want an iPod Touch as I'm sure there are people who still want a 17" MacBook Pro. But the size of that market just doesn't support continuing those products.
 
I just want the option to have 8 or 16gb, same resolution as the iPad 2. for around 250-300(which is why I say 8gb to make it happen). I'm a college kid, so I don't need much, and in fact NEVER saw myself getting a tablet, but after playing with the Kindle Fire....well my opinion changed. I doubt I'd buy a kindle fire, because I love the apple ecosystem, but after I graduate in a couple years who knows what neat 7 inch tablets there will be!
 
After using a tablet, the iPod Touch looks really small.
After using a tablet, an iPhone looks really small... It doesn't mean iPhones will flop ;) iPod touch is still very attractive device, and with the release of 5th gen Apple proved they have some serious plans for the future of iPod touch, just because they made huge leaps making it almost identical to the iPhone. iPod touch appeals to people who wants an iPhone without a phone and at the same time very compact mobile device to listen to music on the go. That's why iPad mini or regular are no competition to iPods and vice versa.
 
Should intro 2 versions

Version 1: shrunk 16GB iPad 2 for $299 at 55% the weight of the iPad 3.
Version 2: retina display with A6 processor variant, 8mp camera w/32GB for $499 at 60% the weight of the iPad 3.

These prices should be close to maintaining current iPad margins. I would prefer version 2 to the iPad 3 since it should be more portable and easier to hold in one hand.
 
Hello. Just my $0.02 on the issue. I don't think the pricing on the iPod Touch is relevant. I think that Apple with phase out the iPod Touch after the release of the iPod Mini.

The iPod Touch evolved as an alternative to the iPhone for people who didn't want to pay a monthly charge, but still wanted to run iPhone apps or surf the net. Remember Smartphones weren't as common then as they are now.

The iPad has probably cut into a significant part of that market. The iPad mini will cut into even more of that.

I don't expect Apple to cut the iPod Touch as long as sales and profits are good. But I expect it to go the same way as the 17" MacBook Pro.

After using a tablet, the iPod Touch looks really small. Yes, I'm sure there are people who would still want an iPod Touch as I'm sure there are people who still want a 17" MacBook Pro. But the size of that market just doesn't support continuing those products.

When I first got my iPad, I thought maybe I could retire my iPod touch. That lasted until the next time I was doing laundry and wanted to listen to music while folding my clothes. I then needed something that fit in my pocket, so I had to dig out my touch again.

I now have an iPhone from work, so I'm no longer in the market for a touch. But unless the phone/data plans for smartphones come down so much that everyone can afford it, there'd always be a market for a pocketable "tablet" device without the phone component. iPad and iPad mini might fight each other for the same market, but the market for the touch is distinct. The touch could start fighting with the nano, though, if the storage size of the nano grows comparable to the touch.
 
which leads to cannibalization

You say that like it's a bad thing. Why would Apple care if people are choosing between Apple Product A which they make money on and Apple Product B which they also make money on?

The only way that would be a problem would be if one of the products had significantly lower margins than the other, and I doubt that would be the case.
 
You say that like it's a bad thing. Why would Apple care if people are choosing between Apple Product A which they make money on and Apple Product B which they also make money on?

The only way that would be a problem would be if one of the products had significantly lower margins than the other, and I doubt that would be the case.

Let's see....

30% Margin on $499 = $149.70

30% Margin on $249 = $74.70

Hmmm...looks like you're right, no difference whatsoever.
 
Let's see....

30% Margin on $499 = $149.70

30% Margin on $249 = $74.70

Hmmm...looks like you're right, no difference whatsoever.
Just to begin with that you're wrong and there's no canibalization at all between iPod touch 32gb with retina display at 299$ and iPad mini 8gb non retina at 299$. Huge difference in storage, huge difference in screen quality, and huge difference in portability. If you wanna tablet you have to sacriface storage and opt for non-retina, if you want an iPod you get small screen and not that comfortable operation. There's no competition between those two devices.
 
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