Why an iPad Mini makes sense (and why not to gripe about one)

Discussion in 'iPad' started by davey1107, Sep 26, 2012.

  1. davey1107 macrumors newbie

    Joined:
    Sep 27, 2011
    #1
    Few Apple products have been as contentious as the rumored iPad Mini. I can't recall the Mac Fanatic community getting more up in arms about anything Apple since that Newton that ran on depleted uranium and baby otter tears. So amidst the gnashing of teeth over the almost-certainly-to-be-released-next-month device, maybe its time to take a look at why an iPad Mini isn't just a good thing, but a great one.

    Demand: Detractors say there's no desire for a smaller iPad; that if Apple releases one supplies will pile up at stores until unfortunate shoppers are buried in an avalanche of excess inventory, forcing Apple to purchase vast tracts of landfill space reclaimed from decomposed Atari 2600 E.T. game cartridges.

    The numbers don't support this myopic view. In 2011, about 25 million tablets were sold in the US. 28% of these were for smaller tablets, largely the Kindle Fire – sales which granted later fell precipitously...hey, can we start calling it the 'Kindle dwindle'?? What this figure tells us that if someone bought a tablet in 2011 that wasn't an iPad, in most cases they bought one that was smaller, cheaper and lighter. So some people (around 7 million of them) want one or all of these features in a tablet. That sounds like demand to me.

    Over the same period (12/10 - 01/12), Apple's global tablet market share fell from 68% to 57.6% (Strategy Analytics, January 2012). These numbers don't suggest anything wrong with the iPad - the iPad 3 release was wildly successful - but they do show Apple losing ground to increased competition amongst an environment of growing tablet total unit sales.

    We can also agree that Apple is a pretty desirable brand. Given Apple Care, the retail store presence, the perceived luxury value, the quality of the products, etc…if a lot of people are opting for a Kindle Fire (shudder) just because of price, A LOT of them would move to Apple if there something at a comparable price point. I mean, Kindle has its “many” fans (hey Mark and Tom, if you’re reading this), but it’s clear that a lot of people who can’t afford a $500 iPad are choosing this over doing without.

    Given ALL of this, let's say Apple releases an iPad Mini. Yes...I know…you hate the very notion...just curl up in a fetal position with your classic 9" iPad if this gets stressful. And let's also say that from 2012 Q4 forward, the iPad Mini allows Apple to take back a measly third of the 'smaller tablet' market (they usually take 2/3rds, but let's be conservative). Based on 2011 sales figures and future sales expectations, we can estimate iPad Mini taking the following sales back from competitors:

    50 million units (2013 US total tablet sales) X 28% (2011 small tablet market sales) x 33% (Apple's iPad Mini snags a third of mini tablet owners) = 4.62 million units "stolen" from competition, or about $1.4 billion in gross sales snatched from Amazon/Samsung/etc. And this doesn't include existing iPad owners picking up a second, or other factors...this is ONLY a rough estimate of how many people would buy an iPad Mini that otherwise might have picked up a Kindle Fire. $1.4 billion in sales careen from Amazon and Samsung right back to Apple. Huzzah. (Unless you're Amazon, I suppose.)

    Can they do it? Is it worth it?

    Offering consumers choices is usually a good thing. The big question is whether the reward is worth the risk. To decide this we have to look at development costs. Doing so points to three more major reasons an iPad Mini makes sense.

    1. The cost to develop an iPad Mini is low: You know it and I know it – building an iPad Mini is about making a smaller case and then figuring out how existing iPad/iPod/iPhone components should fit. This isn't a new product in terms of R&D... Apple won’t spend billions to bring this to market. For all intents and purposes development costs are negligible maybe a few million to engineer the thing and get the vendor issues worked out.

    2. The cost to produce an iPad Mini seems doable: Reliable sources reflect a production cost of approx. $150 for a $250 iPod Touch and $375 for a $499 iPad. To complete with the Kindle Fire and other 7” tablets, analysts think Apple needs to stick to a price point around $300. To keep the same profit margin, they’d need a production cost down around $200. This seems feasible - most components should cost about the same as existing iPod Touch or iPad parts. The real wildcard is the retina display, which was reported to cost $87 per unit for iPad 3 (VentureBeat, 3/12). More recent estimate suggest a current cost of around $70 per. There are also reliable reports of LG and Apple looking at cheaper, non-retina options for iPad Mini. Regardless, to get an iPad Mini to market it seems like Apple needs to be able to produce it for around $200. Given what we know, tough but possible.


    3. The cost to roll out and advertise an iPad Mini is minimal: Apple utilizes a marketing strategy of using their ads to show off the latest and greatest item while simultaneously advertising ALL of their products. Apple ads drive consumers to the store/website, where Apple's product line is comprehensively displayed and sold. Apple doesn’t necessarily pay more for ads when they release a new product, they use their existing ad budget to roll new products in. Whether this fall's ads feature the iPad 3, an all-new iPad 4 (fingers crossed) or an expanded iPad family (if there's a single ad featuring an iPad mini in diapers I swear I'm slitting my wrists), the advertising cost to Apple is probably about the same with or without an iPad Mini.

    Inarguable conclusion: an iPad Mini makes sense.

    It just does, get over it.

    Looking at this data, if Apple can overcome production cost issues...this thing will cost a few million to introduce in exchange for billions in increased sales.

    You still don't want them to release a mini?

    Why? For the love of all that's holy, why the blankety blank not?? When a company dominates a market, and that company has $150 billion in cash sitting in the bank, and they're watching people eagerly buy up a similar-but-slightly-smaller variation of their product, shouldn't they compete? They have the resources and the brand name. If they try and fail, iPad Mini goes the way of the 24" iMac. But if they succeed, they'll make billions, enabling them to develop ever bigger and better gadgets for you (or smaller and cheaper, as the case may be).

    I've spent a couple of months thinking about this, and wondering why the fundamentalist Mac Fanatic community (the Mac Taliban, if you will, lol) is soooooo against an iPad Mini. At first I thought they were being protective of Apple, but that's rubbish. One MacBook Pro Retina in a million gets image retention and they're all over the Internet griping, driving customers away from the product and the brand...so they clearly don't care about pushing people away from their beloved Apple.

    Maybe it's a subtle bigotry. Maybe Mac fanatics see anyone who’d buy a 7” tablet as “unworthy.” Or maybe it’s that old convention that Apple is the “alternative” brand enjoyed by a mass minority of computer users. Perhaps an iPad Mini detractor is like a 1980’s fan of The Cure, who watched 1992’s “Friday I’m In Love” propel their beloved indie band into the pop rock scene. (I’ll admit to still cringing at the memory of millions of scrunchies suddenly appearing at concerts.)

    On the pro-mini side, if you're wondering why I'm so for a Mini, it's for this simple reason: I love Apple, but I also own Apple stock. As an investor, spending a few million to potentially make billions is what we call a "no brainer." I'm pro-iPad Mini for the simple reason that it's one of the best ways to get my shares from $675 to the somewhat-universally-expected $1000. And I’m critical of anti-mini posters for the same reason. These are the same people who wrote of the HORRORS the iPhone would bring to Apple’s bottom line. If Steve Jobs had listened to people like this, Apple stock would still be sitting around $80 per share (where it was in 2007 before iPhone) and not $700 (where it is today).

    Whatever the reasons for being anti- or pro-mini, Mac fans should take a deep breath. Securities analysts are on the ground in Asian production facilities, and the 7-ish inch screens rolling off Apple production lines definitely aren't a novel new Apple TV stand. The iPad Mini is coming, and it'll probably be a huge success.

    So get on board...tell people you think it'll be great. Best case, you'll look prescient. Worst case, you say the market shifted back toward bigger screens, allowing Apple to move to a possible future iPad Max.

    Davey Williams
    Los Angeles, CA
    Occasional writer and .00001% owner of Apple, Inc.
     
  2. Matt8045 macrumors regular

    Joined:
    Mar 2, 2012
    #2
    I just want innovation, an iPad mini would not be innovative...
     
  3. mantan macrumors 68000

    Joined:
    Nov 2, 2009
    Location:
    DFW
    #3
    Wow!!! An extremely well thought out post!!!

    It wonder to me a lot of the 'anti-mini' sentiment comes is rooted in the comments Steve Jobs made about there not being a need for a smaller tablet. It seems like people feel that a mini is an admission that maybe Jobs was wrong. But there is clearly a market for this that is separate than the iPad market. There are customers who value portability. There are customers who (gasp) can't afford a second, third (or even first) iPad who would jump all over another device for the spouse, kids or grandkids for $299.

    I also think there is more than a bit of Apple snobbery. Some people cling to the illusion that Apple is a luxury brand (even though they now sell 'free with contract' phones) and the 7 inch tablet market is for consumers who can't afford a regular iPad.

    Still others, like the poster above, hold on the myth that Apple has carefully crafted that they value innovation and creating markets more than following others.

    While that's partly true, Apple truly values making money. And they are darn good at it. And I can't find any of the reasons above to keep them from going for the easy cash grab of the mini. As the OP wrote, this requires minimal R&D. They can roll out something that will absolutely dominate the segment.
     
  4. Minhimalism macrumors 65816

    Minhimalism

    Joined:
    Jan 6, 2012
    Location:
    Texas
    #4
    Then what the hell WOULD be innovation? You people are all so quick to complain about things that don't even exist yet. Does it have to have holograms for it to be innovative? Half of you don't even know what you want when you say you want innovation, jesus christ.
     
  5. Matt8045 macrumors regular

    Joined:
    Mar 2, 2012
    #5
    A mini iPad would be the equivalent to say a MacBook Air 13 inch being out for a few years then releasing a 11 inch just for the sake of making a smaller one, with no added features. Sorry I like high tech gadgets that are ground breaking. A mini iPad doesn't excite me at all.
     
  6. Virinprew macrumors 6502

    Joined:
    Apr 24, 2012
    #6
    Quite an analysis. My opinion is there will be iPad mini. Steve Jobs is not here anymore. His word is not a law. And there are tons of people who want smaller iPad. I agree with you.
     
  7. sineplex macrumors 6502

    Joined:
    Aug 24, 2010
    #7
    i don't understand all the hoopla over ipad sizes.
    look at the ipod range for goodness sakes.

    People just fear change, fear cannibalism and also fear that somehow
    their 9" investment will be superceeded by a little brother.

    So what? look at the different sizes of televisions!


    Internal email thread between Apple execs reveals plans for 7in iPad

    http://www.macworld.com.au/news/int...apple-execs-reveals-plans-for-7in-ipad-66873/

    iPad mini is definately coming. The only question now is when?
    i still don't see it happening until at least the 1st quarter 2013

    ----------

    why come to an ipad mini thread? lol :p
     
  8. djransom macrumors 68040

    djransom

    Joined:
    May 14, 2008
    Location:
    Chi-Town
    #8
    Then the product is not aimed at you. Your wants doesn't equate to everyone else wants :rolleyes:
     
  9. JesalTV Guest

    Joined:
    Aug 24, 2012
    Location:
    London
    #9
    The iPad Mini absolutely makes sense, and anyone that can't see that is simply myopic.
     
  10. SR45 macrumors 65832

    SR45

    Joined:
    Aug 17, 2011
    Location:
    Florida
    #10
    Really ? I want it, so that makes it innovated enough for me. Small, easy to handle, Store away, and use. I don't need something larger, so this is the perfect tablet for me and by the way many others.

    You want innovation. Why did you even bother to come here since its not for you ? Thank goodness you don't work for Apple
     
  11. poloponies macrumors 68030

    Joined:
    May 3, 2010
    #11
    First of all, your stats are in error (to begin with, you understate 2011 tablet sales by 40 million plus). Second, Apple won't and can't compete on price. The new iPod Touch is priced at $299, so the best bet would be that a smaller tablet comes in at $399 (replaces the place-holding iPad 2). At $399, Apple won't appeal to the budget-minded market who will pay $199-$249 regardless what brand they're buying. So it will augment the sales of the current iPad but won't lure people from Amazon/B&N/Google in droves.
     
  12. jryanl macrumors newbie

    Joined:
    Jul 15, 2010
    #12
    An iPad Mini intrigues me from the simple reason that I think it would be a great alternative for kids. However, that is only if they can make the price reasonable enough. I would love to have something like a iPad mini that I can give to my kids on road trips. They would have games and movies right there to keep them occupied. I use 2 old iPod touches right now but the screen is just so small when it comes to watching a movie. I could use a windows or android tablet but lets face it, why?
     
  13. mantan macrumors 68000

    Joined:
    Nov 2, 2009
    Location:
    DFW
    #13
    That business case is going to sell a TON Of them. As soon as you've seen a movie on an iPad, going back to an iPhone or an iPod touch is a letdown. I'm guilty of it myself.

    My daughter and I have iPhones, my son has an iPod touch. But on road trip everybody wants my wife's iPad to watch a movie. I wouldn't buy another iPad for $399, but I'll be first in on the mini if it's $299. I'd likely buy two. I'd rather take the smaller form factor on trips than the iPad.
     
  14. mwulf67 macrumors regular

    Joined:
    Mar 10, 2011
    #14
    Because it's the right price and it does the job? I truly hope Apple gets in the affordable, tablet game for the same reasons you mention, but if not, I will have no problem buy something from someone else...I am willing to pay a bit more to stay with Apple, but what I am not willing to do is to ignore a solution simply because Apple doesn't have one...
     
  15. poloponies macrumors 68030

    Joined:
    May 3, 2010
    #15
    As soon as you've seen a movie on a 10" iPad you won't go back to the smaller screen of a 4" iPhone/iPod but you WILL go to the smaller screen of a smaller iPad?
     
  16. Sech macrumors member

    Joined:
    Mar 31, 2012
    #16
    That's a really good point. I purchased a Nexus 7 a few months back and fell in love with the form factor. The OS is fine, but I miss the integration with the rest of my life in the Apple echosphere, but not enough to stop me from selling my iPad 3 as its use diminished greatly with the Nexus. I still have an iPhone and if Apple releases a smaller iPad I am back in, until then the solution I have is pretty good.
     
  17. Mliii macrumors 65816

    Mliii

    Joined:
    Jan 28, 2006
    Location:
    Southern California
    #17
    I agree with this and would definitely be interested in the smaller form factor of an iPad mini.
    Heading into the last few days of September, I find it interesting that we haven't seen more part leaks or other information related to a potential October event and release. A month before the iPhone 5 came out, there was a ton of intelligence suggesting form factor, components, etc. On the iPad mini front, it's been pretty quiet.
     
  18. mantan macrumors 68000

    Joined:
    Nov 2, 2009
    Location:
    DFW
    #18
    Absolutely. 7 inches is actually easier to hold up and watch. A guy on the plane next to me had a Galaxy Nexus and it seem to be the perfect size for watching a movie or reading a book.

    A 7 inch tablet has more than twice as much area as iPhone 5 screen. The only way the iPhone 5 improved was showing widescreen movies. It's a 'bigger' screen - but the experience is pretty much identical to the 3.5 inch screen.

    It's like watching a 55' inch TV and 35' inch TV. Both are fine in the right environment. But watching TV on a 20 inch TV always sucks.
     
  19. PracticalMac macrumors 68030

    PracticalMac

    Joined:
    Jan 22, 2009
    Location:
    Houston, TX
  20. cantthinkofone macrumors 65816

    cantthinkofone

    Joined:
    Jul 25, 2004
    Location:
    Missouri, USA
    #20
    I'd buy one if it was under $300. I don't want a full sized iPad.
     
  21. KPOM macrumors G5

    Joined:
    Oct 23, 2010
    #21
    Hmm. I've owned MacBook Airs since the very first one and am a big fan of the 11.6" version. It, to me, embodies the MacBook Air concept even better than the 13.3" version. Actually, I got the sense once the 11.6" was released that it was the version that Apple always intended to release once they could produce a notebook that small that didn't make the design and performance compromises of a netbook. And today Apple pretty much owns that space. There are plenty of 13" and 14" Ultrabooks, but very few 11.6" designs, even though Apple sells quite a lot of the smaller MacBook Air.

    We don't know why Steve Jobs publicly trashed the idea of a smaller iPad. Maybe he genuinely was convinced there would be no market, or maybe he didn't want to fragment the iPad until it was firmly established in the marketplace. Or maybe it was just another "misdirection."

    However, in late 2012 iPad is firmly established as a brand, and there is demand for a smaller product. I think if there were more women in Apple's executive team or on their board, this product would have been released a long time ago. A common complaint about the iPad is that it is heavy and not suited to a woman's smaller hands. This would take care of that.

    ----------

    i disagree. I think Apple could get it to $299. Remember, the iPod Touch likely has a higher resolution screen and 32GB of flash storage. A $299 iPad could have a 1024x768 screen and 16GB of flash.
     
  22. jmdwifi macrumors newbie

    jmdwifi

    Joined:
    Jan 13, 2012
    Location:
    Virginia
    #22
    Hey I have an idea. Don't buy one, that will show them who is who. I on the other hand, will buy one as soon as it comes out. I would love a 7 inch iPad. I have a 7 inch galaxy plus and it's the perfect size. I find IOS smoother and I have apps that I bought for my iPad before. I sold it because if I am going to carry around an almost 11 inch device, I might as well carry a small laptop or Air. I am selling my galaxy and waiting for a 7 inch iPad.
     
  23. danpass macrumors 68020

    danpass

    Joined:
    Jun 27, 2009
    Location:
    Miami, FL
    #23
    I definitely want an iPad mini.

    Makes much more sense for what I would use it for.
     
  24. brewno macrumors 6502

    Joined:
    Jun 8, 2007
    Location:
    Montreal, Canada
    #24
    lol, you are wrong.
    Once the iPad Mini reaches the market with the traditional LED screen, the iPad Mini 2 will come with the LED/eINK Hybrid. And that's going to blow your mind.
     
  25. chleuasme macrumors 6502

    Joined:
    Apr 17, 2012
    #25
    You'll notice the screen of your MBA 11.6" has not the same resolution as the 13.3" MBA.
    If this smaller MBA works right, it's because the resolution is still big enough to do some work (that is, enough pixels) AND the pixel density is about the same as on the larger MBA. But then, the screen is not only smaller, it displays less datas too.
    I don't see the comparison accurate with the case of a 1024x768 7.85" smaller iPad, where you'd expect to do exactly the same tasks with same apps as on the original iPad. And I'm doubtful that'd work right.

    To the OP, very few deny there is a market for a smaller device than the iPad.
    For now, we haven't seen much success in this category of products. Apple eco-system with services and stores would sure add value to a mini iPad over other similar products.
    Apple needs to get it right to sell it, that's not only a question of market capture. Is a cramped low cost low resolution non retina smaller iPad in their plans? Maybe they can find better
     

Share This Page