Apple’s iPad Mini

Apple’s move to price the iPad Mini at a starting price of $329 may preserve profit margins, but ultimately may cede some of the tablet market to the likes of Amazon and Google’s Android army.
The $329 price tag was viewed as a negative development among a few analysts and tech observers on Twitter. Indeed – the $329 price for the iPad Mini is tricky and appears to be designed to ensure iPad 2 sales are cannibalized instead of the latest version of the popular tablet.
Analysts were mixed on the iPad Mini pricing. The general theme is that the iPad Mini expands the total addressable market for Apple and strengthens its hammerlock on the tablet category. However – Apple could have delivered a death blow with a $299 price. Despite all the bluster about Google’s Nexus 7, the price difference between the Android tablet and iPad Mini makes the comparisons tricky.

Apple's iPad Mini
iPad Mini.

Apple’s iPad Mini will bring a lot more excitement and a little more confusion to the holiday shopping season.
It only takes a few minutes playing with the iPad Mini to realize the scaled-down tablet computer will be a sure-fire hit with longtime Apple disciples and potential converts who’ve been looking for a more affordable entree into the mobile computing market.
With a 7,9-inch screen, the iPad Mini is perfectly sized to be stuffed in Christmas stockings. Recipients who will discover the pleasure and convenience of being able to take pictures, surf the Web, watch video, read books and listen to music on an exquisitely designed device that’s pancake thin.
As enticing as that all sounds, the iPad Mini also causes a dilemma, albeit a pleasant one.
The new option will make it even more difficult for holiday shoppers to figure out which mobile device to buy for their loved ones — or for themselves.

Chief Executive Officer Tim Cook unveiled a smaller, thinner iPad that carries a price high enough to shore up profit while leaving room for competitors to sell their tablets more cheaply.
Apple said yesterday that the 7,9-inch iPad mini will cost $329 to $659, depending on memory and wireless features. With that starting price, the company is sticking to its strategy of charging a premium for its products to preserve industry-leading margins as it competes in a market that NPD DisplaySearch predicts will more than double to $162 billion in five years.
Cook is betting that a set of features that includes dual cameras, long battery life and access to iTunes and the company’s App Store with more than 275,000 iPad software applications will induce consumers to shun cheaper alternatives. Amazon.com Inc. (AMZN)’s Kindle Fire HD, Google Inc. (GOOG)’s Nexus 7 and tablets from Samsung Electronics Co. (005930) all start at around $200.
“Competitors are probably breathing a sigh of relief” – said Chris Jones, an analyst at Canalys. Even so, he said the device will be a popular holiday gift and predicted that Apple will sell more than 10 million iPad minis by the end of the year, even after going on sale in November.
Investors were disappointed Apple didn’t give the gadget a lower price to box out competitors. Shares in the Cupertino, California-based company fell 3,3 percent to $613.36 after the announcement. Apple’s stock has dropped 13 percent since reaching a record on September 19, two days before the company released the iPhone 5.
Shares in Amazon rose as much as 2,7 percent after the announcement, and closed in New York at $234,31, up less than 1 percent. Barnes & Noble Inc. (BKS), which makes the Nook tablet, climbed 6,1 percent to close at $15,32.

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