Let the crazy tablet games begin. The first move was Apple’s. The second moves have been made.
Microsoft’s Surface tablet will start at $499 for a 32GB model. Compare that to Apple’s iPad at $499 for a 16GB model. Google’s Nexus 7 tablet starts at $199 for the 8GB model, while the 16GB version is $249. Amazon’s Kindle Fire HD starts at $199 for the 16GB version, while the 32GB model is $249.
It’s clear that Apple and Microsoft prefer the high road (products with actual margins) vs. Amazon and Google at the low end (selling products at cost).
Apple has the next move. What will be the price of Apple’s 7-inch iPad mini?
If disruption is the name of the game, Amazon and Google are disrupting the nascent tablet market, dropping the iPad’s market share from about 80-percent to just over 50-percent. Of course, that’s unit market share. The iPad is probably the only profitable tablet device on the market, so Apple’s loss of market share has them crying all the way to the bank.
Yoni Heisler in NetworkWorld says the price should be $199.
That’s a ridiculous pipe dream. Sure, the great unwashed masses would love to have a slightly smaller iPad 3 for less than half the price of the current model. That will happen when Toyota prices their Lexus line the same as Toyota models.
First things first. Apple is very proud of their products and price them accordingly. The highly touted iPod touch, with a 4-inch screen and 32GB of storage starts at $299– $100 more than Amazon and Google’s 7-inch tablets (though with less storage).
Does anyone truly believe that Apple will push an 8GB iPad mini out the door and price it for less than an iPod touch? Sure, a $199 iPad mini would be disruptive to the competition, but it would also be very disruptive to Apple’s entire iPad line which is highly profitable.
Time will tell, but I expect an iPad mini to start at $349 for a 16GB version. That’s still a bargain, and, historically, Apple commands both higher prices and higher margins than competing products. I would be pleasantly surprised if the 16GB iPad mini starts at $299, but disappointed if it is $399 (the same as the 10-inch iPad 2 model).
What would really be disruptive is a 16GB iPad mini with dual cameras, Retina display, 10-hour battery life, Siri, Wi-Fi, and 4G LTE. For $349. Apple would keep their margins, and users would get a superb value for the money.