iPad Mini sees mixed response

25 October 2012

NEW YORK: Apple's new iPad Mini, a smaller tablet seeking to offset rising competition from rival devices such as those made by Google and Amazon, has received a mixed response from analysts.

The iPad Mini has a 7.9-inch screen and will cost $329. This compares with a screen size of 9.7 inches and a price starting at $399 for the older iPad2, and is intended to bolster the firm's dominant position.

As reported by Reuters, Philip Schiller, Apple's SVP, worldwide marketing, said: "The most affordable product we've made so far was $399 and people were choosing that over those devices.

"And now you can get a device that's even more affordable at $329 in this great new form, and I think a lot of customers are going to be very excited about that."

Gene Munster, an analyst at Piper Jaffray, argued that although up to 20% of iPad Minis could be purchased instead of the larger iPad Apple would still achieve a significant overall boost in market share. He added that Apple could take 80% of the tablet market in a year, versus 70% today. "Their market share is going to go up," he said.

Brian White, an analyst at Topeka Capital Markets, predicted that 5m and 7m of iPad Minis could be sold during its first three months on sale, helping boost Apple's global market share of 68.2%,

"We believe Apple's dominance in the tablet market and the iPad's unparalleled ecosystem will provide the company with a significant advantage in the smaller-sized, lower-priced tablet market with the iPad Mini," he said.

By contrast, Trip Chowdhry of Global Equities Research, suggested Apple's new introduction "failed to live up to the hype", and had deeper concerns about Apple's future.

"Innovation at Apple is over … Just incremental improvements, nothing groundbreaking," he said. "The best is over for Apple. iPad Mini is playing catch up to Google Android [and] probably will have a mediocre customer adoption."

The $329 price tag was cited as a key problem by some industry watchers, who did not believe it was a viable alternative to cheaper offerings like Amazon's Kindle Fire and Google's Nexus 7.

"We were hoping the price would be at least a little lower given its competition is situated as low as $99, with many starting in the $199 to $249 range," said Ben Reitzes, an analyst at Barclays Capital.

However, other observers argued this pricing strategy means Apple will retain its premium status, and enhance perceptions that the firm's products were worth the extra cost.

"We see this as Apple playing both defence and offense," Shaw Wu, an analyst at Sterne Agee, said. "They're defending against 7-inch tablets from its competitors, plus going after even more potential PC buyers who instead opt for tablets."

Data sourced by Reuters; additional content by Warc staff