Tim Cook: iPad Mini Priced 'Aggressively'

[Cockney Rebel]

"One of the things we try to do is to create a product that people will love for months and years and continue using" ...

Tim, you tell that to the millions of people who were/are outraged by the fact that you outdated their "new iPad" (3rd gen) after 6 months!

Sorry ... it had to be said

 

[econgeek]

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.

This is deliberate. iOS is the genuine article, the original. This is also why Apple isn't radically changing the styling of the iPhone.

They are making them icons the way the coca-cola bottle shape became an icon.

 

[Fanboi4life]

The only product in the Apple line up that's "aggressively" priced is the subsidized 16 GB iPhone. Everything else is just "priced"...

 

[rmwebs]

Selling stuff at cost doesn't make sense in the long run.

Apple's not a charity.

You do realise that Apple generally sell at over 100% profit, dont you. The iPhone 4 for example cost around $188 to make, and it sold for a hell of a lot more than that.

They could sell the iPad Mini at $200 and still turn a healthy profit.

 

[QCassidy352]

The problem is that the only reason someone would buy this product over iPad 4 is price, but the price is not that much lower.

Who is the person who can afford the $329 for this but can't afford the extra $170 to get iPad 4?

That makes no sense on two levels. First, there is another reason someone might get one - because it's significantly smaller and about 1/2 the weight. Amazing that you don't see how that might be an advantage, as it's the whole point of the product. Do you not understand the MacBook Air in relation to the MacBook Pro, either?

Second, you think $170 isn't significant? It's 50% the cost of the product! And it's a bigger difference than the difference between the mini and the other tablets people keep comparing it to (fire, n7).

I'm used to this fomum's rampant insanity and reflexive moaning over basically everything apple releases, but the outcry over the mini is a high (low?) point in recent memory. Just mind boggling.

 

[mattnotis]

If the regular iPad is too big for you, it might be wise to put your money towards a gym membership instead of a new gadget.

 

[paul4339]

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.

Amazon gives the Fire away cheap and earns income from customers using the Fire to buy stuff from Amazon... It uses the Gillette model (give the razor away at cost and charge for the razor blade)...

Apple make most of it's profits from hardware sale (with exception of appleTV, which also uses the Gillette model).

.

 

[Cockney Rebel]

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.

... pfft, more like 6 months just like the 4th gen iPad scenario!

 

[Lesser Evets]

When we set out to build it, we didn't set out to build a small, cheap tablet. We set out to build a smaller iPad that offered the full iPad experience.

And they did. Success.

For 66% of the price of a full iPad, it works well.

What is amazingly crap is that an iPod touch is $299. Are they on drugs at Apple? It should be $199 and up. Who would buy an iPod Touch when $30 more gets you an iPad???

 

[ipedro]

iPad mini vs iPod Touch

I'm very curious to see the holiday sales for the new iPod touch. The touch is clearly geared at the younger crowd. It's an iPhone without an iPhone price and without an iPhone data plan.

What originally started off as a music player, the iPod touch's market is iOS now games over music. A 4" screen is pretty limited for games but it work; a 7.9" display on the other hand is better geared to games.

Portable music is well covered with the iPod nano and Shuffle. Does the iPod touch do anything better than the products on either side of the iOS lineup?

Now if you were a kid asking your parents for a new iOS device for Christmas, would you get a $299 iPod touch with a 4" screen or an iPad mini for $30 more with a 7.9" screen?

I can't help but imagine that the iPod touch's days are numbered.

 

[paul4339]

You do realise that Apple generally sell at over 100% profit, dont you. The iPhone 4 for example cost around $188 to make, and it sold for a hell of a lot more than that.

They could sell the iPad Mini at $200 and still turn a healthy profit.

Cook states that the GM is *well* under the company average (today he reported the GM to 40%). This implies the iPad Mini costs over $198. (in otherwords $130 *gross* profit. max. is generated from $330 price tag).

.

 

[kckl]

The problem is that the only reason someone would buy this product over iPad 4 is price, but the price is not that much lower.

Who is the person who can afford the $329 for this but can't afford the extra $170 to get iPad 4?

Some people in the world who travel by public transportation would like to get a smaller tablet which is the truth. When you go to Europe/Asia, you don't see a lot of iPad on the road. I think that's where the iPad mini shines.

 

[econgeek]

Kindle Fire HD:

Runs a crappy rip-off OS, that Amazon (not exactly a software company) modified to its own ends, so its a variation on crap. Might be a better looking variation, but the thing that makes it crappy is not the looks, but how it works.

"1. 8.9" screen. 1" greater than iPad mini."

You're comparing size but ignoring technology and manufacturing process. You're completely ignoring quality.

"2. 1920x1200 HD display comparing to 1024X768 in iPad mini."

Again, comparing size, not quality.

"3. Dual Wifi it is."

Dubious abou this.

"4. Front HD camera. No back camera, but who is taking pictures with their lame iPad camera?"

Uh, a lot of people. This is the same camera that, when it was in the iPhone, was the number one camera on Flickr.

Plus, its a lot easier to take pictures and video with an iPad mini than an unwieldy, heavy, kindle.

Further, the camera is not the hardware, but the hardware and the software, and Apple's software is far more usable.

"5. Priced $299, comparing to $320 of iPad's mini."

Amazon's losing money and they couldn't even beat Apple by more than $30? I think Amazon's losing more than $30 per unit too!

And this for crappy hardware that is a lot heavier?

So Tim Cook, go and tell your pure marketing statements, untrue conclusions, to stupid customers.

So, a crappy product is not actually even cheeper (when you count the subsidy) and you think people buying Apple products are stupid?

Really?

 

[camholder]

You think their strategy is 'If you say a stupid thing enough times people will think its true'?

 

[QCassidy352]

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.

Oh gee, someone who compares apple spec for spec to a competitor and is outraged that it "doesn't measure up." Honestly, it's the exact same thing over and over for years and years. Yes, you can build a faster pc for less money. Yes, there are android phones with higher specs. Yes, there are cheaper tablets.

If all you care about are specs and price, it's a marvel you follow apple at all. Apple never has and never will race to the bottom. They are selling design, software, integration, and perhaps most simply of all, a superior user experience. I'm not saying you have to care about those things, but they are what apple sells. Not the highest spec at the lowest price. Never have, never will - unless they want to become just another dell/lg/Samsung/hp/etc. - which, given that they can buy and sell all those guys many times over, I'm guessing they don't.

 

[FlameofAnor]

"One of the things we try to do is to create a product that people will love for months and years and continue using" ...

Tim, you tell that to the millions of people who were/are outraged by the fact that you outdated their "new iPad" (3rd gen) after 6 months!

Sorry ... it had to be said

I have the iPad retina, but I don't feel it's outdated, just because they improved it. It still runs all the apps beautifully, so I'm not sure how much of an improvement a faster processor would really give me. Until developers create apps that require that extra power, it is more icing on the cake than real need.

I'm still running an older 24" iMac. Would I appreciate a newer one with a faster processor and better graphics chip?...... sure, but I can still run all my software without an issues.

Some people have to have the latest thing, whether their needs actually require it or not. I'd say the new iPad retina falls into that camp. If you hadn't gotten an iPad yet, then now is a good time to jump, but if you have the last version, there's no pressing need to upgrade.

 

[o0jelly0o]

The problem is that the only reason someone would buy this product over iPad 4 is price, but the price is not that much lower.

Who is the person who can afford the $329 for this but can't afford the extra $170 to get iPad 4?

The only reason I want one is because it is smaller and lighter than the iPad 4. I could give a $@%@ about the price, that is completely irrelevant to me.

 

[econgeek]

You do realise that Apple generally sell at over 100% profit, dont you. The iPhone 4 for example cost around $188 to make, and it sold for a hell of a lot more than that.

They could sell the iPad Mini at $200 and still turn a healthy profit.

Nonsense. Apple's margins are generally %40, not %100.... and that's including a software business which tends to have large margins.

You're comparing manufacturing cost to final sale price, but ignoring everything else, which is to say the least silly.

This is like saying that Photoshop should cost $10 because the box it comes in only costs $4.

... and then you say they could sell the mini for $200 and turn a "healthy" profit.... which is a complete non-sequitor.

 

[xyion1]

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.

Amazon sells the Kindles at or below cost - so they are making a grand total of $0 per sale. (They lost $274 million this quarter). If they made a relatively low 25% margin the Kindle Fire HD would be $375. Just for example, Verizon Wireless made a 50% gross margin last quarter. So 1/2 of every bill customers paid was pure profit.

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.

$329 is aggressively priced compared to its manufacturing cost, not to the market. $299 would have been a loss leader and $249 likely would have caused the universe to implode

You do realise that Apple generally sell at over 100% profit, dont you. The iPhone 4 for example cost around $188 to make, and it sold for a hell of a lot more than that.

They could sell the iPad Mini at $200 and still turn a healthy profit.

$188 does not include R&D, iCloud, iOS updates, etc etc etc. While they are "free" they have to be paid for from somewhere. Most companies bill out for 100% more than they pay, look at lawyers that are $500/hour or even Car Mechanics where it costs $400 to replace spark plugs, which costs $20 in material (on my car anyway).

All of that said, I think that the mini is overpriced for what it is - especially considering that next year it will likely have retina (and the subsequent processor to power it). But remember, by the time the mini (or the iPod Touch, or the Apple TV) gets the A6/A6X iPhone and iPad will be up to A7/A7x, so they are likely to be one generation behind.

If you have enough money to take a loss selling the previous versions and upgrading to the latest and greatest than more power to you. I will go check out the mini (and the rest of the new products released this year) in store and perhaps buy some of them if they fit my requirements because no other company offers products which run OS X and iOS, an ecosystem which I am locked into, for better or worse.

 

[paradox00]

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.

You forgot to add $15 to the Fire's price to remove the ads. Too bad no sum of money will bring iOS apps to the Fire.

 

[merlyn412]

I would assume he means that the ipad mini is priced aggressively within the apple ecosystem.

 

[FlameofAnor]

That would be me!

So, people like you aren't a myth after all.

 

[driceman]

I guess I don't know enough about these things to argue one way or the other, but I'd like to know how much of a profit margin they get here compared to their other devices.

On another note, they keep talking about how the iPad Mini has the same resolution as the iPad 2 so that it can play the apps already on the App Store, and yet the retina iPad can do that too when they quadrupled the pixel density. Why not double the pixel density of the iPad 2 for the next iPad Mini? Surely that would be much better, whether it's "retina" or not I don't know...

Again, I don't know enough about tech, but wouldn't that still allow the Mini to play all of the apps on the App Store without scaling weirdly?

 

[econgeek]

You think their strategy is 'If you say a stupid thing enough times people will think its true'?

Well, it seems to be working. Look at all the rabid android fans you see on the web who think that Apple "stole" the mac from Xerox, or that Android was started in 2005 and thus pre-dates the iPhone's touch UI, or that 2001: A Space Odessy is "prior art" for Apple's multi-touch patents.

These people are not driven by facts, logic or reason. They are driven by ideology.

The reason they call anyone who defends Apple against falsehoods a "cultist" is because they are projecting.

 

[Lazy]

It is priced aggressively

Think about it this way. The iPad mini is basically a smaller iPad 2. (So no need to whine about the lack of an A6 or retina display; the iPad 2 doesn't have those either.)

Aluminum costs less than a dollar a pound. That means there's less than 25 cents difference in cost for the aluminum between the 2 and the mini. The machining on the mini would be ever so slightly less, say a dollar or two.

The screen presumably costs less, but as stated somewhere else maybe $5 less. Call it $10 for good measure.

Everything else content-wise would be about the same. So something that costs only $10-15 less in just parts alone, with others costs the same, they are selling for $70 less. That's aggressive.