Apple Unwraps iPad Mini To Take On Amazon And Google
- 12 years ago
Apple Inc took the wraps off an 8-inch tablet on Tuesday (October 23) in its biggest product move since the debut of the iPad two years ago, launching a smaller version of the gadget into a market staked out by Amazon.com Inc and Google Inc.
The 7.9 inch "iPad mini" marks Apple's first foray into the smaller-tablet segment. Apple hopes to beat back a charge onto its home turf of consumer electronics hardware, while safeguarding its lead in a larger tablet space that even deep-pocketed rivals like Samsung Electronics have found tough to penetrate.
"With Apple they have the big ten-inch tablet and then they have the iPod Touch and it looked like they needed something in the middle there, because a lot of their competitors are going for that market. So you've got Google with their Nexus 7 tablet and also the Kindle Fire. And those products have sold really well, mainly for the price and also because of the form factor -- it's easier to lug around and to read books on, to take on an airplane, so it's a nice form factor. And it's interesting because at one point Steve Jobs really sort of poo-pooed that size, but we're seeing that consumers really like it," said Maggie Reardon, a senior writer for CNET.
But at $329 (USD), the iPad mini costs more than some analysts had expected. Wall Street fears the gadget will lure buyers away from the $499 (USD), flagship 10-inch iPad, while proving ineffective in countering the threat of Amazon's $199 (USD) Kindle Fire and Google's Nexus 7, which have wafer-thin margins or no margins.
"We got exactly what we had thought we were going to get: the iPad Mini came in and I think the only little surprise there was maybe the price. Some people were hoping it was going to be a bit cheaper than it was. It's prices at $329 (USD), so there had been rumors that that might be the price point that it hit, but I was crossing my fingers for something cheaper," said Reardon.
Wall Street analysts have said for months that Apple was planning a less expensive version of the iPad to take on cheaper rival devices, a move they say might hurt its margins but prevent its rivals from dominating an increasingly important segment.
The stock was down 2.5 percent at $618.42 (USD) in afternoon trade, after gaining 4 percent on Monday in the run-up to the event.
Apple also announced a fourth-generation full-sized iPad with improvements in graphics and processing speeds, just two days before Microsoft is due to show off its own "Surface" tablet. The new iPad starts at $499 (USD), its usual entry point.
"In general, we got all the products that we thought we would get. We got the iPad Mini, the 13-inch Macbook Pro with retina display, there was the Mac Mini -- it seems like everything's smaller this time -- there was the thinner iMac, and then the big surprise for most of us was the fourth-generation iPad. And that was a surprise mainly because they just came out with the third generation iPad six months ago, but this new, fourth generation iPad has a faster processor and so maybe that is why they came out with it now, so they can get ahead of everybody else for the holidays," explained Reardon.
A smaller tablet is the first device to be added to Apple's compact portfolio under Chief Executive Tim Cook, who took over from co-founder Steve Jobs just before his death.
Amazon's Kindle and Google's Nexus 7 have grabbed a chunk of the lower end of the tablet market and proved demand for a pocket-sized slate exists. That has forced Apple into a space it has avoided and at times derided, analysts say.
The "starting sweet spot" for the tablet would be in the $249-$299 (USD) range, according to a survey of more than a thousand consumers by Baird Equity Research.
Cook kicked off Tuesday's event, held at the opulent California Theater in San Jose. In a rarity for a company that tightly controls events, Apple live-streamed its invitation-only presentation to Apple devices such as the iPad and Macintosh computers.
Apple's chief rival in the smaller-tablet arena is Amazon, which proved a 7-inch tablet at around $200 (USD) has consumer appeal. The Kindle Fire, released last year for $199, was one of the hottest-selling holiday gadgets. It pressured Amazon's margins but gave it potentially millions of new high-spending customers.
Amazon sold more than a million Kindles a week during December, paving the way for others like Google with its Nexus 7 to try and beat Apple in a market the company created.
The Internet retailer has now put its second-generation Kindle Fire HD in the market, which it says is the "best-selling product across all of Amazon worldwide," based on undisclosed U.S. sales figures and international preorders.
Google's Nexus 7 tablet, built by Asian manufacturer Asustek quickly ran out of stock after its July launch.
All three companies will be vying to get their devices on shopping lists during the U.S. holiday season, which traditionally starts next month.
Jobs famously derided the 7-inch screen, saying such a device should come with sandpaper so users can file down their fingers. But an internal email revealed during a patent trial showed he turned more favorable to the idea by early 2011.
Apple has sold 100 million iPads so far, with the device accounting for 26 percent of Apple's fiscal third-quarter revenue.
But analysts are concerned now about erosion of Apple's industry leading margins as it takes on the Kindle Fire. It earned gross margins of 23 percent to 32 percent on U.S. iPad sales between October 2010 and the end of March 2012, according to a July court filing by Apple.
"I think that Apple is clearly going to continue to dominate. People like the iPad and, you know, they are the dominant company in tablets overall, and I don't think that they are at risk of losing that. I think this mid-range market that we're getting into here with the iPad mini, I think there still probably going to sell very, very well, but I don't think Amazon or Google are completely out of the market. I think that they still have a chance," finished Reardon.
Rivals haven't fared as well. Amazon's first Kindle Fire just about breaks even, according to IHS iSuppli estimates, and Google has said its Nexus 7 is being sold at cost.
The 7.9 inch "iPad mini" marks Apple's first foray into the smaller-tablet segment. Apple hopes to beat back a charge onto its home turf of consumer electronics hardware, while safeguarding its lead in a larger tablet space that even deep-pocketed rivals like Samsung Electronics have found tough to penetrate.
"With Apple they have the big ten-inch tablet and then they have the iPod Touch and it looked like they needed something in the middle there, because a lot of their competitors are going for that market. So you've got Google with their Nexus 7 tablet and also the Kindle Fire. And those products have sold really well, mainly for the price and also because of the form factor -- it's easier to lug around and to read books on, to take on an airplane, so it's a nice form factor. And it's interesting because at one point Steve Jobs really sort of poo-pooed that size, but we're seeing that consumers really like it," said Maggie Reardon, a senior writer for CNET.
But at $329 (USD), the iPad mini costs more than some analysts had expected. Wall Street fears the gadget will lure buyers away from the $499 (USD), flagship 10-inch iPad, while proving ineffective in countering the threat of Amazon's $199 (USD) Kindle Fire and Google's Nexus 7, which have wafer-thin margins or no margins.
"We got exactly what we had thought we were going to get: the iPad Mini came in and I think the only little surprise there was maybe the price. Some people were hoping it was going to be a bit cheaper than it was. It's prices at $329 (USD), so there had been rumors that that might be the price point that it hit, but I was crossing my fingers for something cheaper," said Reardon.
Wall Street analysts have said for months that Apple was planning a less expensive version of the iPad to take on cheaper rival devices, a move they say might hurt its margins but prevent its rivals from dominating an increasingly important segment.
The stock was down 2.5 percent at $618.42 (USD) in afternoon trade, after gaining 4 percent on Monday in the run-up to the event.
Apple also announced a fourth-generation full-sized iPad with improvements in graphics and processing speeds, just two days before Microsoft is due to show off its own "Surface" tablet. The new iPad starts at $499 (USD), its usual entry point.
"In general, we got all the products that we thought we would get. We got the iPad Mini, the 13-inch Macbook Pro with retina display, there was the Mac Mini -- it seems like everything's smaller this time -- there was the thinner iMac, and then the big surprise for most of us was the fourth-generation iPad. And that was a surprise mainly because they just came out with the third generation iPad six months ago, but this new, fourth generation iPad has a faster processor and so maybe that is why they came out with it now, so they can get ahead of everybody else for the holidays," explained Reardon.
A smaller tablet is the first device to be added to Apple's compact portfolio under Chief Executive Tim Cook, who took over from co-founder Steve Jobs just before his death.
Amazon's Kindle and Google's Nexus 7 have grabbed a chunk of the lower end of the tablet market and proved demand for a pocket-sized slate exists. That has forced Apple into a space it has avoided and at times derided, analysts say.
The "starting sweet spot" for the tablet would be in the $249-$299 (USD) range, according to a survey of more than a thousand consumers by Baird Equity Research.
Cook kicked off Tuesday's event, held at the opulent California Theater in San Jose. In a rarity for a company that tightly controls events, Apple live-streamed its invitation-only presentation to Apple devices such as the iPad and Macintosh computers.
Apple's chief rival in the smaller-tablet arena is Amazon, which proved a 7-inch tablet at around $200 (USD) has consumer appeal. The Kindle Fire, released last year for $199, was one of the hottest-selling holiday gadgets. It pressured Amazon's margins but gave it potentially millions of new high-spending customers.
Amazon sold more than a million Kindles a week during December, paving the way for others like Google with its Nexus 7 to try and beat Apple in a market the company created.
The Internet retailer has now put its second-generation Kindle Fire HD in the market, which it says is the "best-selling product across all of Amazon worldwide," based on undisclosed U.S. sales figures and international preorders.
Google's Nexus 7 tablet, built by Asian manufacturer Asustek quickly ran out of stock after its July launch.
All three companies will be vying to get their devices on shopping lists during the U.S. holiday season, which traditionally starts next month.
Jobs famously derided the 7-inch screen, saying such a device should come with sandpaper so users can file down their fingers. But an internal email revealed during a patent trial showed he turned more favorable to the idea by early 2011.
Apple has sold 100 million iPads so far, with the device accounting for 26 percent of Apple's fiscal third-quarter revenue.
But analysts are concerned now about erosion of Apple's industry leading margins as it takes on the Kindle Fire. It earned gross margins of 23 percent to 32 percent on U.S. iPad sales between October 2010 and the end of March 2012, according to a July court filing by Apple.
"I think that Apple is clearly going to continue to dominate. People like the iPad and, you know, they are the dominant company in tablets overall, and I don't think that they are at risk of losing that. I think this mid-range market that we're getting into here with the iPad mini, I think there still probably going to sell very, very well, but I don't think Amazon or Google are completely out of the market. I think that they still have a chance," finished Reardon.
Rivals haven't fared as well. Amazon's first Kindle Fire just about breaks even, according to IHS iSuppli estimates, and Google has said its Nexus 7 is being sold at cost.