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The Real Reason An iPad mini Makes Sen$e For Apple

The Real Reason An iPad mini Makes Sen$e For Apple

July 23, 2012
When Apple unveils the sixth-generation iPhone this fall, they might also announce the arrival of an iPad mini at the same time. When they do, Cupertino could once again change the tablet landscape to their benefit. Why would Apple release a smaller tablet? It's all about the "price umbrella," according to Ryan Jones from I Am Concise. This so-called umbrella, which Apple CEO Tim Cook discussed previously, is "when a company with dominant market share maintains high prices, leaving an opening for new competitors to enter at lower price points." To solve this issue, Apple has previously released less expensive iPods and iPhones to grab that market. For example, after the iPod Classic, Apple unveiled the iPod nano and iPod shuffle. With the iPhone, they kept the iPhone 3GS and priced it for next to nothing. With the iPad, Jones expects more of the same, as Apple follows three previously used pricing strategies:
  • create a new product line
  • keep selling old hardware
  • get someone else to subsidize the product
He states:
In order to eliminate the pricing umbrella Apple needs to serve the $199 to $399 price range. ($199 is the bottom of the market until new technologies emerge, new price models emerge, or a company decides to sell the hardware at a loss to gain market share.)
And with this, we have the price point for the so-called iPad mini: This means that if you believe Jones' analysis and we do, Apple is likely to release an iPad mini later this year and price it between $199 and $399. Earlier this month, The New York Times concluded that the iPad mini was coming and would sell "for significantly less than the latest $499 iPad." For more iPad mini rumors, be sure to click here. Also, be sure to look at our previous report, "Apple Has 163 Reasons To Release Fabled iPad mini." Ready to buy an iPad mini? Source: I Am Concise

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