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Tim Cook: iPad Mini Priced 'Aggressively'
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Like many others, I've always been happy to pay a premium for Apple products. But the difference is in the past you know with the premium you are getting the best of what Apple was offering at the time (not necessarily the best in the industry spec wise, but at least an advancement in their own product line). I'll still buy the iPad mini this time around, but the fact that even compared to their own products, it's significantly underpowered. When people can safely predict 2-3+ key features that will most likely be in next year's updated version, then you know the product is not the best they can offer.
They've gone from a company where people are curious about what innovative tech they'll bring in their future updates, to one where people are expecting basic features for NEXT year's product (e.g. A6, retina display). We don't even really need product leaks to predict what's coming next now. While the current iPad mini is likely usable and adequate in its current form, their new products no longer feel...as one certain person would put it, "magical".
They've gone from a company where people are curious about what innovative tech they'll bring in their future updates, to one where people are expecting basic features for NEXT year's product (e.g. A6, retina display). We don't even really need product leaks to predict what's coming next now. While the current iPad mini is likely usable and adequate in its current form, their new products no longer feel...as one certain person would put it, "magical".
Apple will adjust the price if sales are not what they anticipate. By pricing the unit starting at $329, I'm sure they have calculated how much they could cut costs and still maintain a healthy profit margin, if needed.
Keep this in mind if say after Black Friday, prices are cut $30......
Keep this in mind if say after Black Friday, prices are cut $30......
You start with a faulty assumption. I already have a Retina iPad. I'll be buying at least one iPad mini.
I'd rather have the iPad mini because the size is what I want. The iPhone is too small.... and the iPad is too big.
I suspect there are a lot of people like me. The mini is portable enough without compromising the usage experience like the phone does... while big enough to be great for browsing and watching movies, without being so large and unwieldy as the iPad.
He's talking about pricing it aggressively in relation to its manufacturing cost. And I'd guess he's right.
These new low-yield GF2 screens are clearly costing Apple a whole load more than your regular screen and that's massively depressed their margins (which they've already done as they said on the call that the gross margin is much lower on the iPad mini).
Clearly Tim wasn't willing to depress them any more - he's already bent the rules a certain amount for the iPad mini to get it in at 329 and wasn't willing to do that any further.
As a sop to the faithful, what they could have done is made the storage / LTE premium lower in simple terms than the full-size iPad (whilst keeping the premium similar in percentage terms). E.g. 329, 399, 469 (wifi) and 399, 469, 549 (LTE). But, I suspect, Apple thinks (realises?) it didn't need to - as supply (of low-yield screens and lightning cables) will be the key constrained on sales, not price. They can drop the prices once the supply / demand equation evens out.
If you can't make enough iPads to satisfy demand, might as well sell them at a higher price until supply / demand evens out. You can always revisit your value proposition (by dropping the price or upgrading the device) when supply and demand balance.
If you need evidence that supply will be tight - read his comments and see also the iPhone 5 launch.
These new low-yield GF2 screens are clearly costing Apple a whole load more than your regular screen and that's massively depressed their margins (which they've already done as they said on the call that the gross margin is much lower on the iPad mini).
Clearly Tim wasn't willing to depress them any more - he's already bent the rules a certain amount for the iPad mini to get it in at 329 and wasn't willing to do that any further.
As a sop to the faithful, what they could have done is made the storage / LTE premium lower in simple terms than the full-size iPad (whilst keeping the premium similar in percentage terms). E.g. 329, 399, 469 (wifi) and 399, 469, 549 (LTE). But, I suspect, Apple thinks (realises?) it didn't need to - as supply (of low-yield screens and lightning cables) will be the key constrained on sales, not price. They can drop the prices once the supply / demand equation evens out.
If you can't make enough iPads to satisfy demand, might as well sell them at a higher price until supply / demand evens out. You can always revisit your value proposition (by dropping the price or upgrading the device) when supply and demand balance.
If you need evidence that supply will be tight - read his comments and see also the iPhone 5 launch.
I'm getting one - sold my iPad 3...it's very easy to justify when you consider the number of devices with screens I have and carry around when I travel.
In my experience, these people don't actually understand the specs. It's like they compare clock rate of two CPUs of different architectures, as if it's relevant. They don't know about the co-processors Apple builds into their devices and so they say things like Apple's products are underpowered when they aren't.
They also claim this is a premium price, but it isn't.
The iPad mini at $329 is a better deal than the kindle fire or nexus at $200-- and those products are subsidized!
It's astounding, its like they don't know there's a difference in the quality and capability...... which is why they then start claiming that Apple users are cult like who will buy at any price because of markting, or something.
I guess they need a rationalization.
At the end of the day, cheap crap is always going to cost less, especially when you subsidize it.
But if you buy it, you won't be nearly as happy. So its a worse deal.
Really? You think price is the reason? Then you've completely missed everything that's been said...this is not a race to the bottom, it's a smaller, lighter device that will fit a different usage type.
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That's my experience too - they think the number of cores is most important, followed by GHz and RAM. Try explaining architecture or OS efficiency and they're not just clueless, they think you're crazy and stupid.
iOS needs an overhaul. Every time the cool new product photos are released, I look at them and say to myself: "Cool new hardware! But there's that plain-Jane iOS home screen again.....blah." And I'm brought back down to earth. I honestly think the product photos would be more effective with the screen turned off.
Worse than that, who is the person that can afford the top end iPad 4 with all the bells and whistles, but still foregoes the iPad 4 and opts for the base model mini?
Me for one.
It's such an ignorant thing to say that people will buy this product based on price alone, stop thinking it and stop doing it.
What I don't understand is why someone doesn't go and join a discussion in the 100s of threads on this forum where people are discussing the mini and say, "I'm not sure why you'd want to buy this product, can you help enlighten me?" It's completely arrogant to assume you already know, and then to declare that publicly is the height of arrogance, and worse than that it's completely offensive.
Laugh all you want, but it will sell like crazy and may well turn out to be Apple's most popular iPad, despite it's price being a bit higher than some feel it should.
We have an iPad first gen still that our kids use. We had an iPad 2 and sold it to get the 3rd gen, which we still have. I rarely use these when outside the house b/c the size just isn't appealing to me to travel around with. My wife and kids beg to differ though and love them.
I prefer to read and do things on my iPhone over the normal size iPads. But I've always wanted something a bit bigger than the iPhone for that. The iPad Mini may be it for me. But I'll probably wait it out until next year as we're about to upgrade our iPhones.
It has nothing to do with "only so much more money and you get a bigger better iPad" for me. It has everything to do with size and portability for what I would use it for.
I prefer to read and do things on my iPhone over the normal size iPads. But I've always wanted something a bit bigger than the iPhone for that. The iPad Mini may be it for me. But I'll probably wait it out until next year as we're about to upgrade our iPhones.
It has nothing to do with "only so much more money and you get a bigger better iPad" for me. It has everything to do with size and portability for what I would use it for.
Full size one is 50% more expensive. It's not an insignificant difference. The mini is also literally almost 1/2 the weight.
Read these forums over the past few months. There are a ton of posts about people crying for a inbetween sized tablet from Apple. The market is surely there.
But the question is will they get a Mini now or wait for v2 Mini or get a Touch or a standard iPad? That is the question.
Please explain me the math, because I don't get it.
Kindle Fire HD:
1. 8.9" screen. 1" greater than iPad mini.
2. 1920x1200 HD display comparing to 1024X768 in iPad mini.
3. Dual Wifi it is.
4. Front HD camera. No back camera, but who is taking pictures with their lame iPad camera?
5. Priced $299, comparing to $320 of iPad's mini.
So Tim Cook, go and tell your pure marketing statements, untrue conclusions, to stupid customers.
Kindle Fire HD:
1. 8.9" screen. 1" greater than iPad mini.
2. 1920x1200 HD display comparing to 1024X768 in iPad mini.
3. Dual Wifi it is.
4. Front HD camera. No back camera, but who is taking pictures with their lame iPad camera?
5. Priced $299, comparing to $320 of iPad's mini.
So Tim Cook, go and tell your pure marketing statements, untrue conclusions, to stupid customers.
Well said - that arrogant attitude is all over tech forums these days...mostly from those who aren't half as knowledgeable as they think they are.
Just because Apple's competitors are forced to sell at cost to get people to adopt their products, doesn't mean Apple needs to race to the bottom.
Apple makes quality products, and charges accordingly. Do they have a healthy profit margin?..... sure, but people want their products and will pay their asking price.
I can think of a lot of other products that sell for much more inflated prices than Apple's products.
Indeed. Apple doesn't mine my data (Google) or insert ads into my UI to cheapen the product (Amazon)
Anyone note the similarities of both companies. Amazon posted poor numbers as did Google. Giving stuff away for free often doesn't make good business sense when you're large like these companies are.
This just highlights how damn out of touch the upper management is with the common, average person.
Aggressively priced would have been $249. Sensibly priced would have been $299. Overpriced is $329. Whilst it is 'only' $30, thats a pretty big difference on the grand scale of things. The fact that its caused numerous debates and groups to feel its overpriced should be enough evidence of this.
$299 would have been the sweet spot IMO.
Aggressively priced would have been $249. Sensibly priced would have been $299. Overpriced is $329. Whilst it is 'only' $30, thats a pretty big difference on the grand scale of things. The fact that its caused numerous debates and groups to feel its overpriced should be enough evidence of this.
$299 would have been the sweet spot IMO.
The whole point was to make an iPad that more people could afford. Making it retina would not achieve that goal. Is that so hard to grasp?
Apple has been selling the iPad 2 to schools, who need a lower price point. The iPad Mini can fill the same role at a reduced price.