• Thermonuclear War: Our iPad mini analysis:


    Today Apple announced 2 new iPads. The iPad with Retina display and the iPad mini. Let’s check out the effect the mini will have on the Tablet market.

    Whether you love or hate Apple, you’ve got to admit that they’ve done a great job of managing their brand. In the 3 categories where Apple is strongest; that would be computers, phones and tablets, their devices are seen as premium products and generally command the highest prices. Take tablets for example. Until the announcement of the iPad mini, at $429, the iPad 2 was Apple’s cheapest tablet. Looking around, there aren’t a lot of 10” Android tablets that cost more than $429. Most of the 10” Android tablet action happens around $349.

    A year ago, I was having a conversation about Android tablets and said that Apple could destroy the market for Android tablets by lowering the the price of the iPad. In order to compete Android makers have to make tablets with similar hardware yet with lower price points. The problem is that each Android tablets maker can’t sell their tablets in the same numbers of iPads so they can’t get the same economies of scale.
    Of course, Apple isn’t that interested in lower end of the market. Sure, if the mini were to cost $199, it would have a good shot of being the most popular device of all time. The thing is that most of their devices all cost more than their competitors. Bringing ‘cheap’ devices to the market could be damaging to Apple’s brand. After all, while it’s easy to lower prices, it’s much harder to raise them.

    Another thing to consider is that pricing the Mini too low would trigger a bloody price war which would ultimately hurt everyone who isn’t a consumer. Still, I do think that tablet prices still have a ways to go. Going forward, each generation of hardware is going to bring diminishing returns. That means you won’t have to buy a cutting edge tablet to get a good experience. My guess is that Amazon, which is currently selling the Kindle Fire HD for around cost, will lead the way. Maybe they’ll bring out a Kindle Fire HD with offers for $49 as long as promise to shop only at Amazon and name your first born “Jeff”.

    So in that sense, the iPad mini is priced about right. When I think of 7” Android tablets, I’m guessing the most popular one is the Amazon Kindle Fire HD followed by maybe the Samsung Galaxy Tab 2 and then probably the Google Nexus 7. If I’m wrong about the order feel free to correct me. The Fire HD is $199 while a 16GB Nexus 7 is $279 (32GB Nexus is $299) with the Tab 2 somewhere in-between. That makes the Mini about $70-130 more this competition.

    They’ve got comparable specs to the Mini. The Mini’s display is bigger but has lower resolution. Their processors’ performance are in the same ballpark, etc.

    All else being equal, the biggest factor in determining the a tablets price (besides it’s brand, people will pay more for Apple and to a lesser extend Samsung) is it’s screen size. The iPad mini’s screen measures 7.9” so it’s a bit bigger than the competition. Since the iPad 2 is around 2” bigger, let’s just say each inch adds about $50 in value. That means $50 of the $70-130 difference is from the screen size. Ignoring other factors, that means the Apple logo costs $20-80 for the mini.

    Assuming you’re not pro-Android, I could see a lot of people willing to pay an extra $20 for the logo. As for $80, it’s a little murkier. The 16GB Nexus and Tab 2 may need a slight price reduction but only by $20 or $30. On the other hand, the Fire HD will do just fine at $199.

    The real story here is what the iPad mini will do to sales of the iPad 2 and iPad with Retina display.

    A while back, I wrote about how tablets are mainly used for consuming media. However, since then I’ve changed my mind, smaller 7” class tablets are great for consuming media while larger ones can be useful for productivity.

    This really helps segment the market, you pay more if you want to do more with your tablet. So, while I’m sure the mini will cannibalize some of it’s bigger brother’s sales, it probably won’t be an extremely high percentage.

    It’s also what keeps it from competing with many 10” Android tablets like Galaxy Tab 2 10.1. They’re priced similarly but their screen sizes are too different.

    As for upcoming ARM powered Windows Tablets it's really hard to say what effect the Mini will have on them. While I'm sure the mini will steal some sales I'm not sure what effect Windows will have on the market. Personally, I have a hard time understanding on they'll be successful but at the same time I'd love for Microsoft to prove me wrong.

    When I first started writing this, I was going to talk about how the iPad mini was going to ruin the Android tablet market but as I was writing this, it made me realize that all it does it maintain the status quo. Thermonuclear war, averted.
    This article was originally published in forum thread: Thermonuclear War: Our iPad mini analysis: started by howard View original post
    Comments 29 Comments
    1. torontocolin's Avatar
      torontocolin -
      16 GB Nexus 7 is $259 (249 USD). 32 GB Nexus 7 doesn't officially exist yet. It's expected that next week Google will discontinue the 8 GB, drop the 16 GB to $209 (199 USD) and introduce the 32 GB at $259 (249 USD).

      As for the popularity order, I can't say for sure, but if I had to guess I'd put it at Kindle Fire > Nexus 7 > Galaxy Tab 2.
    1. Drillbit's Avatar
      Drillbit -
      The processor performance is not in the same ball park. The dual core Apple A5 is comparable to the TI OMAP 4460 used on the Kindle Fire, but not the quad core Tegra 3 used on the Nexus 7.
    1. FFR's Avatar
      FFR -
      Quote Originally Posted by Drillbit View Post
      The processor performance is not in the same ball park. The dual core Apple A5 is comparable to the TI OMAP 4460 used on the Kindle Fire, but not the quad core Tegra 3 used on the Nexus 7.
      Like that even matters at this point.
    1. ceredon's Avatar
      ceredon -
      For Canadians, if you want to access paid content, Amazon and Google are pretty slim pickings. There may be some content, but nothing compared to what is available in the Apple ecosystem. For those wanting pirated content, I guess the others are ahead.

      When considering the pricing, you have to remember that the Nexus 7 and the Kindle Fire are effectively subsidized products. Bloodbath doesn't even begin to describe what would happen in a price war in a subsidized market.
    1. superman17's Avatar
      superman17 -
      Quote Originally Posted by FFR View Post
      Like that even matters at this point.
      Yes it does...it's all about the numbers!!!
    1. FFR's Avatar
      FFR -
      Quote Originally Posted by superman17 View Post
      .it's all about the numbers!!!
      I completely agree

    1. howard's Avatar
      howard -
      Quote Originally Posted by Drillbit View Post
      The processor performance is not in the same ball park. The dual core Apple A5 is comparable to the TI OMAP 4460 used on the Kindle Fire, but not the quad core Tegra 3 used on the Nexus 7.
      I've benchmarked devices using all 3 SOCS (iPhone 4s, Huawei P1 and HTC One X) and all get similar SunSpider scores. My One X is the fastest by the small margin. As for GL Benchmark 2.1.5 and 2.5 my iPhone 4s is slightly faster.

      I'm sure other benchmarks can agree or contradict what I'm saying but they're all relatively close.
    1. coldpower27's Avatar
      coldpower27 -
      Well we're looking at similar to iPad2 performance levels which is fine for the moment. I am sorta glad they segmented the market a bit this time, more choice is a good thing in my opinion.
    1. Morphling27's Avatar
      Morphling27 -
      Quote Originally Posted by ceredon View Post
      For Canadians, if you want to access paid content, Amazon and Google are pretty slim pickings. There may be some content, but nothing compared to what is available in the Apple ecosystem. For those wanting pirated content, I guess the others are ahead.

      When considering the pricing, you have to remember that the Nexus 7 and the Kindle Fire are effectively subsidized products. Bloodbath doesn't even begin to describe what would happen in a price war in a subsidized market.
      They are subsidized or at the least, sold at cost. I've seen half a dozen write ups and it's hard to nail down RnD costs and customer service costs, etc.

      As Howard pointed out and you did about price wars - this has already been fought and ended a long time ago. If one good thing came out of the death of WebOS, it was the fact HP put in consumers' minds the fact a decent tablet can be sold for $99. Now, I get they were ditching it and getting rid of inventory in a manner that suggested impending doom, but the fact is many consumers saw a full 10'' tablet selling in the impulse buy range. All the rest of these tablets remain 'too expensive and a luxury item' in many people's minds.
    1. ceredon's Avatar
      ceredon -
      Quote Originally Posted by Morphling27 View Post
      They are subsidized or at the least, sold at cost. I've seen half a dozen write ups and it's hard to nail down RnD costs and customer service costs, etc.

      As Howard pointed out and you did about price wars - this has already been fought and ended a long time ago. If one good thing came out of the death of WebOS, it was the fact HP put in consumers' minds the fact a decent tablet can be sold for $99. Now, I get they were ditching it and getting rid of inventory in a manner that suggested impending doom, but the fact is many consumers saw a full 10'' tablet selling in the impulse buy range. All the rest of these tablets remain 'too expensive and a luxury item' in many people's minds.
      And that's why Apple probably didn't just right down to the bottom of the price scale. As Howard mentioned, it is easy to lower prices but very difficult to raise them and expect customers to not feel burned. Had they come out of the gate trying to play in the same subsidized, loss-leader playground, they would have entered a price war that would quickly lead to a downward spiral on pricing. Great for consumers but horrible for a company not interested in gambling on whether those consumers will spend on the backend enough to make up for the losses up front. At the point where a company decides it is untenable to continue with the subsidized model, it would be almost impossible for them to try to raise prices. They would be more likely to just exit the market. For a company like Apple, which is a hardware company, while Amazon and Google are services companies, there's just no way I could see them wanting to get into that game, especially right at product launch.
    1. whatcoverage's Avatar
      whatcoverage -
      What I want, vs what Apple pushes.
      No price gouging for memory. 10x markup , you gotta be kidding me.
      Replaceable batteries. Why on earth should I plan for obsolescence.
      My going on 6yrs old laptop works just fine, and it can still do more things a tablet cannot.
      So, the choices for christmas are.
      The Nexus 7, a ARM based Chromebook, mostly so that I'm not supporting Apple's high prices, or giving my life over to Amazon. I could get a 10" refurb ASUS tablet for $250, maybe that's an option.
      Apple has things going their way right now, mostly because people are lazy sheep, but tablets are more like PC's, you just don't need a new one every 2 years like a phone. Well, my phone is even older than my laptop, and gee, it still works too.
      There will always be premium consumers, but the golden age of phone innovation lasted just a couple of iphone years and its now pretty much over. Any one of dozens can do it all. The cachet for most will end as Apple becomes an incremental improver, as seen with the latest iPhone.
      We all want faster, cheaper, better, but that's coming from the hardware guys now, not the designer.
      Think flat screen TV. There was a gold rush, but now we all have one. Its hard to sell them now, and prices plummeted.
    1. seekr's Avatar
      seekr -
      Quote Originally Posted by whatcoverage View Post
      Apple has things going their way right now, mostly because people are lazy sheep, but tablets are more like PC's, you just don't need a new one every 2 years like a phone.
      This statement is so wrong.. mainly because you underestimate how difficult it is to cater to "lazy sheep", if it were easy, the formula would be imitated already. And while you claim "replaceable batteries" may prevent obsolescence, it's the other things in these devices far from the battery that make it obsolete.
      We all want faster, cheaper, better, but that's coming from the hardware guys now, not the designer.
      Think flat screen TV. There was a gold rush, but now we all have one. Its hard to sell them now, and prices plummeted.
      TV's are not the right thing to compare in this argument you make.

      While you may be content in the devices you choose, it's hardly a small task to produce the sales and excitement Apple continues to do. Apple deserves props on that. It's also the same strategy Apple continued with before this millenium. It's failed them to the point they almost died as a company. It's serving them now because through careful planning and market action, they know now the future they were too early to present to the consumers in the 80's is here. The spec war is dead. Software is not taken for granted. And the usability and habits that were formed from the beginning of personal computing, have created the level of expectation and acceptance from where stand today.

      You think if the average consumer cared for planned obsolescence the spec war would not be over, expandability and customization of hardware would still be a booming industry, but it's not. The world of tech has shifted from appliance to fashion. You need to change up across all devices to take advantage of the current trend. Regardless of platform. Anything else is geek-tweeking and a minority movement. There will always be modders, just like people who build custom cars, but it's not the norm.
    1. Mann Incognito's Avatar
      Mann Incognito -
      A side by side comparison between the iPad Mini and the BlackBerry PlayBook for instance just goes to prove that Apple is really pulling a fast one here. iOS6 even has weak HTML5 results which is poor performance indeed coming from the self professed Flash free King of HTML5.

      Other shortfalls include; single mono speaker, single microphone, 1.2MP front facing with no 1080P capabilities, no NFC, no industry standard micro USB, no HDMI out, no rapid charger, lower pixel density, 512MB RAM - half of the PlayBook, no remote function, and no SMS capabilities. I'm sure there's more but I'll leave it at that for now.

      I'm unsure how the iPad Mini can be considered a real competitor, especially with its exaggerated price point. It really is lacking in too many areas for anyone to take it seriously.

      Of course, all this is moot, Apple buyers will be lined up for it anyway.
    1. Doolie's Avatar
      Doolie -
      Quote Originally Posted by Mann Incognito View Post
      A side by side comparison between the iPad Mini and the BlackBerry PlayBook for instance just goes to prove that Apple is really pulling a fast one here. iOS6 even has weak HTML5 results which is poor performance indeed coming from the self professed Flash free King of HTML5.

      Other shortfalls include; single mono speaker, single microphone, 1.2MP front facing with no 1080P capabilities, no NFC, no industry standard micro USB, no HDMI out, no rapid charger, lower pixel density, 512MB RAM - half of the PlayBook, no remote function, and no SMS capabilities. I'm sure there's more but I'll leave it at that for now.

      I'm unsure how the iPad Mini can be considered a real competitor, especially with its exaggerated price point. It really is lacking in too many areas for anyone to take it seriously.

      Of course, all this is moot, Apple buyers will be lined up for it anyway.

      What do you mean, "no 1080P capabilities"? The iPad Mini certainly does record 1080P video and outputs 1080P video as well as HDMI video with the lightning connector.
    1. seekr's Avatar
      seekr -
      Quote Originally Posted by Doolie View Post
      What do you mean, "no 1080P capabilities"? The iPad Mini certainly does record 1080P video and outputs 1080P video as well as HDMI video with the lightning connector.
      Also to add, the SMS capabilities can be argued through iMessage. A remote? WTF? Who cares? By lower pixel density, Mann is comparing 163ppi (iPad Mini) to the massive 170ppi (Playbook) none of which meet the minimum requirement for retina.

      NFC is one of those stupid features Apple won't put in unless it's proven to be innovative to the end user, not because it's a spec war for useless features that try to out compete the iPad..

      One thing I don't understand is why even bring up the Playbook... it's hardly a successful platform and at the end of the day, who cares? It's the ecosystem, the ease of use people are familiar with, the gesture based movements people have come to learn from Apple, the compatibility with existing apps, the app catalogue (I know it's the ecosystem), forget HSMI output, Playbook doesn't have AirPlay which is awesome to have. The iPad mini is a thinner, smaller, better designed version of an iPad 2, which the Playbook obviously failed to beat.

      The iPad mini is an improvement over the iPad 2 with better cameras, better "pixel density" , better video recording, LTE capable, all around just better than the iPad 2 the playbook couldn't beat when it was launched. Good luck to the competitors.
    1. FFR's Avatar
      FFR -
      Quote Originally Posted by tendenzi View Post
      Also to add, the SMS capabilities can be argued through iMessage. A remote? WTF? Who cares? By lower pixel density, Mann is comparing 163ppi (iPad Mini) to the massive 170ppi (Playbook) none of which meet the minimum requirement for retina.

      NFC is one of those stupid features Apple won't put in unless it's proven to be innovative to the end user, not because it's a spec war for useless features that try to out compete the iPad..

      One thing I don't understand is why even bring up the Playbook... it's hardly a successful platform and at the end of the day, who cares? It's the ecosystem, the ease of use people are familiar with, the gesture based movements people have come to learn from Apple, the compatibility with existing apps, the app catalogue (I know it's the ecosystem), forget HSMI output, Playbook doesn't have AirPlay which is awesome to have. The iPad mini is a thinner, smaller, better designed version of an iPad 2, which the Playbook obviously failed to beat.

      The iPad mini is an improvement over the iPad 2 with better cameras, better "pixel density" , better video recording, LTE capable, all around just better than the iPad 2 the playbook couldn't beat when it was launched. Good luck to the competitors.
      +1
      . -------
    1. Doolie's Avatar
    1. seekr's Avatar
      seekr -
      I wonder if Google used NFC to pay the 13.1 million dollars in lobbying the US government this year...
    1. FFR's Avatar
      FFR -
      Quote Originally Posted by tendenzi View Post
      I wonder if Google used NFC to pay the 13.1 million dollars in lobbying the US government this year...

      How else could google reform
      The patent system.

      And I thought Samsung's advertising budget for 2012 was high @2.75 billion.
    1. seekr's Avatar
      seekr -
      Quote Originally Posted by FFR View Post
      How else could google reform the patent system.

      And I thought Samsung's advertising budget for 2012 was high @2.75 billion.
      Google can do no wrong, other then paying off politicians to tip favors in their hand. That's so much nicer than Apple. Those poorly over paid lobbyists just got fatter by going to all those pricey lunches on Google's dime. I'm glad google cares.