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

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iPad mini
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.

Source: AllThingsD