Why Apple’s $329 iPad Mini Will Do Just Fine Against $200 Android Tablets

Why Apple’s $329 iPad Mini Will Do Just Fine Against $200 Android Tablets

It’ll sell just fine at $329.

As is often the case with Apple products, feelings towards the new iPad mini were mixed following the Cupertino company’s special event in San Jose on Tuesday. Many were wowed by its good looks and tiny form factor, which still manages to run regular iPad apps just fine. While others were confused over its $329 price tag.

We had expected Apple to price the iPad mini along the same lines as cheap Android tablets, such as the Google Nexus 7 and the Amazon Kindle Fire, which sell for $200. We didn’t quite expect Apple to go quite that low, but we felt around $250 would be just about right.

Instead, Apple chose to ignore what its competitors were doing. You might say that this is a big mistake, and that the iPad mini doesn’t stand a chance against its 7-inch rivals. But many analysts feel the iPad mini will do just fine at $329.

During Apple’s keynote yesterday, Tim Cook announced that the company had now sold a whopping 100 million iPads since the device first launched back in 2010. ”Why is iPad so successful?” Cook asked. ”Well, there’s a simple explanation for that. People love their iPads!”

And Cook’s right. How many iPad owners do you know who don’t love their iPad? How many iPad owners do you know who wish their iPad was an Android tablet? I’ll bet the answer isn’t many. And Apple’s well aware of this.

“Others have tried to make tablets smaller than the iPad, and they have failed miserably,” Phil Schiller, Apple’s senior vice president of marketing, said during the event. “Competitors are making compromises with their products. We don’t.”

Because of that, and because of the iOS ecosystem that you don’t get with any other device, Apple knows it can price its devices higher than its competitors and still sell millions of units.

“Apple didn’t need to come down to $200; they’ve never done products to hit competitors’ price points,” Mike McGuire, research vice president at Gartner, told AllThingsD.

The iPad mini may not be cheap when compared to small Android tablets, but it doesn’t need to be, because not many ipad users are going to buy an Android tablet. The iPad mini is cheap when compared to a 9.7-inch iPad, however, and that’s what really matters.

People who want to buy the iPad may have settled for cheaper Android tablets in the past because they had no choice. But now they have access to an Apple device, and all the things that come with that — such as impeccable hardware and the iOS ecosystem — without having to spend so much.

“Should Amazon and Google be worried? Yes, they should be worried,” said Mark Moskowitz, an analyst with JP Morgan.

Will that $329 price tag stop the iPad mini from selling by the bucketload? Of course it won’t.

“Though we thought a sub-$300 price would be optimal, the iPad mini’s specs and app ecosystem should be able to command a premium, while also enabling Apple to generate a higher margin,” Baird analyst Will Power told AllThingsD. “We still expect strong sales, even at $329.”

Personally, I was surprised to see the iPad mini priced at $329 — I expected it to be around $250 just like everyone else — but I still don’t think it’s expensive. It’s only $20 more than the cheapest iPod touch, and I know what I’d prefer.

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  • patrickahles

    In the Netherlands the iPad mini is just € 4,- more than the iPod touch. Who are they hurting?

  • FriarNurgle

    I’m going to pass on the iPad mini. Kind of a shame since a tablet is one thing missing in my gadget arsenal. My main reason is the $329 price point for the specs. It’s using the same chip as the iPad 2. Still no word on RAM, but I’m guessing it’s 1/2 GB. My concern is the mini will become fragmented in the iOS ecosystem. New apps will be developed to take advantage of the A6X chip and the mini will be unable to run them with only having 1/4 of the processing power with it’s A5 chip. $250 would have made this an acceptable risk, but given the spec difference, the mini is a pass. You might as well spend the extra 50 bucks and get a “refurb” iPad 3 for $379, wait for an update, or test the waters with the rumored $99 Nexus tablet.

  • Turtle Heart

    I disagree. It is seriously over priced. It will no doubt do well, but even the base price of 329 is not accurate, as most users would want more than the basic item….pointlessly over priced. Cluelessly over priced, in my view.

  • extra_medium

    I wasn’t too surprised at the price, I wasn’t too surprised at the resolution either. I was pretty disappointed that they’d put out the product with a 1.5 generations old CPU though. Yes the A5 is “good enough” for most of today’s apps, but if I spend $500+ (no interest in the base model) on a tablet, I don’t want to have to do it again next year to stay even remotely current. With the big iPad moving to the new A6, I would have expected this one to get the older A6 at least

  • dcdevito

    $199 Nexus 7 > iPad Mini

    But what about a $299 Nexus 10? Yikes – look out 4th gen iPad

  • drnewmedia

    I was going to buy 3 for Christmas but will hold off for now. I had the money and ready to purchase but not with these specs. I will wait for retina display and better processor on the mini 2 or just get 3 refurbished iPad 3′s.

  • MWinNYC

    We’ll see. I don’t think it will compete well with Kindle. Sure, there will be lots of Apple freaks that already have ecosystems in place that will pay the high price to have a mini. But then again, these people would also buy an iTurd if if was in a nice Apple box. I just don’t understand putting 2-yr-old technology into a new product- A5 chip and a lackluster display???? The A5 is now 2 generations ago and Retina Display is on practically everything Apple!!! BTW, I’m an Apple freak, too.

  • stefn

    Love commenters who know more than Apple does about its business. Obviously they are used to Amazon, Google, and Microsoft, none of whom know how to make dollar number 1 off of hardware in this arena. Please, they could really use the advice.

  • Luxlamf

    Was ready to order, don’t need it but was going to get it, even if it was $299, $50 more then I thought it would be at $249. $329? Nah, I want it to do more if I do that, my iPad2 and iPhone 4s will fill the need just fine.

  • markrlangston

    Apple’s setting a price precedence for the future once again setting a pricing standard based on new features like the inevitable Retina Display and (I assume) starting at 32GB for the same price.

    Besides, you can almost count on Apple to drop this year’s iPad mini price by $50 to $100 and have a device that will be in the same pricing space as the Kindle Fire and Nexus 7.

  • markrlangston

    Apple’s setting a price precedence for the future once again setting a pricing standard based on new features like the inevitable Retina Display and (I assume) starting at 32GB for the same price.

    Besides, you can almost count on Apple to drop this year’s iPad mini price by $50 to $100 and have a device that will be in the same pricing space as the Kindle Fire and Nexus 7.

  • Koban4max

    I was hoping they would put retina display on it with A6x.

  • MWinNYC

    I correct myself- the A5 is now 4 generations old!! (4S- A5; new iPad- A5X; iPhone 5- A6; iPad with Retina Display- A6X).

  • eeh73

    I was under the impression that Apple wanted to take market share from Google and Amazon. I guess that is not why Apple produced an iPad mini.

    I suppose it sets up the resell value of the mini 1 when the mini 2 comes out next year. At $329, when the mini 2 comes out and the mini 1 hits ebay, craigslist, etc, it will allow those with smaller budgets to snag one up for about $200-250.

    I’ll pass on the mini 1. Don’t need it, but when they hit the resell market, I’ll prob have some use for it. For now, my iPad 2 is perfect.

  • RaptorOO7

    It’s an Apple product it will sell, that’s a given. However as someone who purchased an LTE iPad 3 just a few months ago I do feel ripped off with a product refresh only 7 months later and the new iPad mini is a low end tablet that will quickly lose iOS updates just like the first iPad did. It will get left behind and people will only be more pissed off at Apple.

  • Harvey Lubin

    “We had expected Apple to price the iPad mini along the same lines as cheap Android tablets”

    That would have been like Apple pricing the MacBook Air in the same range as (the then popular) cheap Netbooks. That would never have happened.

    Although to the uninitiated the MBA may look like just another netbook, it is actually in a separate, higher quality class.

    The same applies to the iPad mini vs. 7″ Android tablets. The iPad mini is about the same external size as 7″ Android tablets, but the similarities stop there. There is really no need to price the iPad mini at rock-bottom prices, because it is in a totally different class of mobile computers.

  • Samir Shah

    I have used an Android 7″ tablet and I wished it was lighter. It used plastic and still it was so heavy. IPad mini uses Aluminium and still is lighter than a pad of paper. When one uses a tablet for long periods of time holding it in one hand these aspects DO MATTER.

  • CharilaosMulder

    “We still expect strong sales, even at $329.”

    Expectations and assumptions are the mother of all fuckups. Learn this simple fact and life won’t be as disappointing.

  • kavi
    “We had expected Apple to price the iPad mini along the same lines as cheap Android tablets”

    That would have been like Apple pricing the MacBook Air in the same range as (the then popular) cheap Netbooks. That would never have happened.

    Although to the uninitiated the MBA may look like just another netbook, it is actually in a separate, higher quality class.

    The same applies to the iPad mini vs. 7″ Android tablets. The iPad mini is about the same external size as 7″ Android tablets, but the similarities stop there. There is really no need to price the iPad mini at rock-bottom prices, because it is in a totally different class of mobile computers.

    Cheap android tabs, apple is making a huge profit out of stupids like you! Ipad is well beyond competitors right now. Its doesnt mean it can price an older gen tab at full price. Kudos to apple for making a good tab in small size following(copying, no pun intended) android oem’s. Apple fans only want beautiful looking products(good job ive), but whats in the kitty matters now. Its so stricted interface. Will sell loads of minis but whats the point, its an old gen tab not for the present.

About the author

Killian BellKillian Bell is a freelance writer based in the UK. He has an interest in all things tech, but most enjoys covering Apple, anything mobile, and gaming. You can follow him on Twitter via @killianbell, or through his website.

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