Apple is looking to fight off rivals bidding to establish a foothold in the tablet market, with the manufacturer reportedly developing a smaller, cheaper version of its bestselling iPad tablet. A possible autumn launch has been mooted so the US manufacturer can capture a slice of the lucrative Christmas market, according to reports from the Wall Street Journal and Bloomberg.
The news that Apple is working on an ‘iPad Mini’ comes after increased competition in the tablet space following a spate of high profile launches. Google recently launched the Nexus 7, a seven-inch device that costs £159 and goes on sale in the UK this month. The device was built by Asus and features a 1.3GHz Nvidia Tegra 3 quad-core processor and a front-facing camera. Microsoft also unveiled its Surface tablet last month, which runs on Windows 8, the latest version of the software giant’s operating system. The Surface tablet will compete with the iPad and is aimed primarily at business users. Amazon is also seen as a potential challenger in the UK tablet market after the company sold millions of its seven-inch Kindle Fire tablet in the US last year. The device is expected to go on sale in the UK later this year.
Although Apple remains the dominant player with a 61% market share according to research firm Gartner, the development of the iPad Mini would be seen as a crushing blow to rivals. According to The Times, Apple insiders told Bloomberg that the company hoped to sell the device for $199 (£127) – half the cost of the current iPad, which ranges from £399 and £699. The iPad Mini could be released by the end of the year. Apple is believed to have been considering launching an iPad Mini for a while as it looks to compete with its rivals in emerging markets, where the company’s devices are considered too expensive for customers.
What the analysts say
So what are the analysts saying about the potential launch of an iPad Mini? IDC analyst Tom Mainelli said that Apple is unlikely to be perturbed by its rivals in the smaller tablets’ market, adding that if the iPad Mini is priced at less than $300 (£194), the company can cause problems for all Android-based tablets. With a report on Apple tracker blog iMore revealing that the iPad Mini will likely have a 7.85-inch screen and be aggressively priced by Apple around the $200-$250 mark, analyst Rene Ritchie said in a blogpost that the Mini will ‘do to the tablet market what Apple did to the MP3 market in 2004 with the expansion of the iPod product line – leave absolutely no space for competitors.’
Andy Hargreaves, an analyst at Pacific Crest Securities, said in a note last week that he expects Apple to sell 35 million iPad Minis in the coming year at $299, ‘with 25% cannibalisation of the larger iPad.’ He said: ‘Apple is approaching a tremendous period of product cycle strength, with anticipated launches of a new iPhone, a 7.85-inch iPad and a refreshed 9.7-inch iPad that are likely to drive strong profit growth and corresponding stock appreciation.’
Such sales cannibalisation of existing iPad models would be minor and would be more than offset by the rewards to Apple for expanding its line, according to Brian White, an analyst with Topeka Capital Markets, who has been beating the drum about a smaller iPad since last autumn, when he coined the term ‘iPad Mini’. He said: ‘We would expect the cannibalisation of the current iPad by the iPad Mini to be relatively minor and potentially in a range of just 10-20%, while the market opportunity could eventually be larger for the iPad Mini given the growth trends in developing countries.’
Editor: Shujaul Azam