Summary: It's possible for Apple to build an iPad Mini that wouldn't cannibalize full-size iPad sales, but it would mean turning to previous-generation technology to do it.
Yesterday, ZDNet's James Kendrick suggested that Apple could rock the world with an iPad Mini, which he dubbed the iBook. Could Apple deliver to market such a product at a price that would work?
Let's see if we can make it work.
I'm not a big fan of the whole concept of an iPad Small as the only real justified reason for it is the point that companies Search engines and Amazon have experienced some achievements with their 7-inch Android-powered pills. If Amazon and Search engines have a 7-inch system, the thinking goes, then so must The apple company.
The issue with the iPad Small is costs. The iPad 3's costs begins at $499 for the platform design, while the iPad 2 begins at $399. An iPad Small would preferably need to be costing or below $299 in order to stay aggressive in the experience of the iPad 2 and 3.
Let's begin with the invoice of components for the iPad 2 and iPad 3 as attracted up by iSuppli returning in March:
The issue with the iPad Small is costs. The iPad 3's costs begins at $499 for the platform design, while the iPad 2 begins at $399. An iPad Small would preferably need to be costing or below $299 in order to stay aggressive in the experience of the iPad 2 and 3.
Let's begin with the invoice of components for the iPad 2 and iPad 3 as attracted up by iSuppli returning in March:
The issue with trying to range down the iPad 3 is that the figures don't add up. Even supposing that creating less sized iPad expenses 20 % less than creating a full-sized design -- considering in that elements are now less expensive than they were returning in Goal -- the element and marketing expenses of the gadgets would still be in the area of $250.
Believe it or not, reducing an iPad doesn't get smaller the cost by that much.
It doesn't make financial any feeling for The apple company to offer a system at $299 that expenses them $250 to make. It's not as though The apple company needs to come up with a way to push up the iOS business. While I acknowledge with Kendrick that "Apple would offer 10 thousand iBooks in just a few short several weeks," it's likely that a lot of these revenue would be at the price of full-sized iPad revenue.
In impact, The apple company would be cannibalizing revenue of a more successful item and placing business over earnings.
That just doesn't sound right.
Another choice would be to take the iPad 2 -- which The apple company still provides -- and use this as a platform from which to make less sized iPad. Right from the begin this would mean a less expensive show, less expensive battery power, less expensive brand and a less expensive photographic camera. Long ago in Goal it was approximated by iSuppli that the renewed iPad 2 cost The apple company some $245 to make. If we believe that an iPad Small centered off of the iPad 2 would cost 20 % less to make, this delivers the all inclusive expenses down to a more controllable $195.
All of a rapid that $299 cost seems possible, even considering Apple's bounteous returns.
This is a far better kick off factor for an iPad Small. It does mean jeopardises, but for a system energizing less sized show -- and perhaps targeted at a different industry -- they issue less. Much of the upgrades made to the internals of the iPad were to generate the new high-pixel-density Retina show board. A scaled-down iPad Small would after all need a lot less elements to power it.
By making the iPad Small on previous-generation technological innovation, it's possible that this would put a damper on cannibalization. Just as people can already select an iPhone 4S, and iPhone 4 or an iPhone 3GS, or an iPad 3 and an iPad 2, a lower-spec iPad Small wouldn't contend straight with the full-sized promotions.
This way the less expensive iPad Small would be seen as a separate system -- much like the iPod contact -- rather than a inexpensive substitute to a costly system.
