Wednesday, October 24, 2012

Apple Losing Its Edge

The Apple event on 23 Oct 2012 launched a smaller iPad known as the iPad Mini, the 4th generation iPad on top of other refreshed products like the Mac mini, Macbook Pro and iMac.

The iPad Mini was obviously the star of the event which everyone was eagerly anticipating. The biggest news perhaps is that it packs a 7.9-inch, 1,024 x 768 screen - the same resolution as the full size iPad 2. The pricing for the ipad mini is high. For the Wi-Fi only models, prices start at US$329 for 16GB going up to $529 for the 64GB model. Compare this to iPad2 which starts at US$399 for 16GB...

Apple obviously has many loyal supporters whom have chosen to use Apple products for years despite the premium (read more expensive) prices. This group is still likely to bite for the iPad mini that Apple just launched. However, the consumer market today for computing tablets is no longer the same as when Apple initially revolutionised with its first mover iPad device.

Steve Jobs had famously said that in his opinion mini tablets would not succeed because the size was insufficient to "create great tablet apps" but that has dramatically changed over recent years. Samsung's Galaxy Tab, Google's Nexus 7, Amazon's Kindle Fire, etc. are all available in smaller sizes than the 10.1" size the traditional iPad eschewed and they have been selling very well.

Apple is now a late comer to this mini tablet market with its iPad mini and its price point does it no favour. The smaller iPad mini is only very slightly cheaper than the full size iPad and hence not expected to make a big impact on cost conscious consumers. From Apple's perspective, that could be a happy problem as the possibility of the iPad mini cannibalising the market for the iPad could be much reduced.

The upcoming Christmas shopping season will be a litmus test. Apple has gone through a number of rough spots recently after the demise of Steve Jobs. iOS 6 mapping software is buggy. iPhone 4 being criticised for not offering anything significantly new except a longer form factor. Child labour use in Apple's supplier Foxconn...

My bets are on Apple's tablet market share shrinking further in the days to come.

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