Apple is Now Forced to Build a 7-inch Tablet

| Editorial

With the success of the Amazon Kindle Fire, Apple can no longer sit idly by and watch this part of the market get gobbled up by a competitor. An avalanche must be averted.

When a company comes to dominate a specific market, it’s seen as a failure if another company steps in and finds a weakness. That’s exactly what Amazon has done with the Kindle Fire.

Of course, the smaller Fire’s screen causes more fumble fingering than the larger iPad. Plus, it has cheaper components and doesn’t have the feel of quality. And, as we all know, Mr. Jobs explained that 7-inch tablets aren’t the right size. At the last earnings report, Time Cook expressed the feeling that it’s easier to lower the price on the iPad than to cut corners and upset the customer. That’s why I predicted that Apple would keep selling a lower price iPad 2, post iPad 3 introduction. Even so, technical and marketing arguments may no longer matter.

Kindle FireKindle Fire

Finally, it’s likely the huge sales surge of the Kindle Fire will be over after Christmas, and the sustained viability of the product in the dark days of February remains to be seen. Even so, short term effects may no longer matter.

What can’t be denied is that Amazon has found a chink in Apple’s armor. Apple execs might be feeling that if only they’d done a better job of understanding their own market, Apple would be earning all these Christmas revenues instead of Amazon. A million Kindles sold per week is evidence of Apple asleep at the wheel. How can Apple prevent this from happening again?

It’s just plain rare for a company to sit back and excuse itself out of a market and potential earnings. Yes, there are technical reasons why a seven or eight inch iPad doesn’t make sense. A composed, self-confident Apple could declare that it will give up a billion dollars to Amazon — in the same fashion that they’ve stayed out of the low price, cut-throat PC market. That kind of restraint and focus would be admirable.

My experience is that Apple execs will become a little touchy about the loss of tablet market share and the unflattering conclusions analysts will draw after the holidays. How and why Apple responds will tell us a lot about how the executive team is feeling about how to compete in the tablet market. My money is on a smart, agressive response instead of no response at all. The fire must be put out soon.

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Comments

aardman

“. . . Time Cook expressed the feeling that it?s easier to lower the price on the iPad than to cut corners and upset the customer.”

Can someone elaborate on exactly what he meant by that?  Does he mean that if Apple has to lower prices, they will just eat the lost margins and never try to recoup even part of it by using cheaper components?

John Martellaro

aardman: Exactly. I call it the “3GS” effect. iPad 2 Production is mature.  It’s sensible to give up some profit margin on an older product as competitors try to catch up.  Capture the margin on the newest stuff. Maintain the brand.

The question is: will that be sufficient to compete with a small, light, easy to handle Kindle Fire?

mhikl

The iPod evolved in form and function and that is to be expected of the iPhone and iPad. Yes, maybe Steve had become a little staid in his ways, a little crotchety and conservative.

Time Tim took a stand at ye old revolutionary orchard. The iPod touch could be reworked to join the iPad family along with a seven inch pad/pod; and the iPhone could have an extra size with phone and pad differing only by the will to phone via cellular or not. Both could phone by Wi-Fi.

Streamlined and intertwined the apple pad family and its integrated systems would be the superstar of the media world of mobility and as a family could certainly find more glory in the world of number.

And from of all this union, surly a ?good? competitor could put the fire out.

Let the pod, phone and pad become one but many.

skipaq

I also think Apple will be entering the 7” tablet market. By most accounts the Fire is a piece of crap that is selling on price and to a degree Amazon’s content. I don’t think Apple needs to do that sort of product.

A well built 7” iOS device would be a good move as long as Apple gets the price right. Somewhere in the $329 range for an iPad perhaps would be right. If Apple really wants to be aggressive then a 7” Touch at around $229. A successful strategy that boxes Amazon into non-profit tablets is all Apple needs.

mohrt

BMW does not complain when they are outsold by Honda Civics. I think the same is here. They are not going to try to compete in this cheap market, much the same reason why they don’t sell a $500 laptop. The return rate on those fires is astronomical, so I read.

NotKatsu!

The ‘earnings’ that Apple is leaving on the table by not competing with the Kindle Fire are, as you must know, negative.

John Martellaro

NotKatsu! That’s Amazon’s problem. I believe that if Apple had designed its own 7-inch tablet, it would have sold at a profit - thanks to Apple’s manufacturing leverages.

John C. Welch

Apple walks away from money all the time. They’re not being “forced” into anything here, barring a sudden bad decision to allow product decisions to be made by pundits.

MOSiX Man

The Kindle Fire a serious competitor to the iPad? Are you serious? To summarize all of the Fire reviews I’ve read, ‘Meh. It’s sorta ok, but the touch-screen is really inaccurate (even compared to those of phones with 3 or 4 inch screens), it’s slow, and the build quality is sub-par.’

Here is some info on the level of customer satisfaction for the Fire:
http://latimesblogs.latimes.com/technology/2011/12/kindle-fire-sparks-remorse-hesitation-but-sales-still-expected-to-be-huge.html

Here is CNN’s best guess for the Fire’s return rate:
http://www.ebookmagazine.co.uk/cnn-guesses-at-kindle-fire-return-rate/20112037

The Fire seems to be a fair e-reader (no e-ink), but is only a wannabe in the true tablet market. It’s having some initial success, but it occupies the low-end. Apple probably makes as much profit selling one iPad, as Amazon makes selling twenty Fires. Nobody at Apple is saying ‘Oh, no! The Kindle Fire is eating our lunch, so now we’ll have to come out with a version of the iPad with a form factor that we’ve already said sucks!’

I predict that, like so many others, it will be Amazon wishing that they’d had a better grasp on the tablet market, which Apple really owns, before releasing a half-baked product like the Fire, and then watching its sales sink into irrelevance, as the holiday buying frenzy wears off.

ibuck

The tablet market isn’t just being penetrated by the Fire. Amazon’s cheaper grayscale models are also selling well.

A 7” tablet doesn’t seem such a big deal, and scales up easily from a 3.5” screen, being 2x as big in each direction, being then 4 times bigger than the tiny screens on an iPhone or an iPod Touch. I don’t know if that’s an easy adjustment for app developers, but think it might be.

Apple didn’t seem to think Weight was as big a factor as color or perceived ruggedness (metal case), and perhaps battery life. Since Jobs said “People don’t read anymore,” Apple may have thought that weight was of lesser importance than having a gorgeous color display for movies, photos, internet, etc. But as someone who reads quite a bit, weight means a lot when reading for hours. And feeling comfortable holding a 6 or 7 inch device (weighing under 8 ounces) with one hand, as opposed to the awkwardness and weight (21 oz or more) the iPad presents, is a big deal for me, and probably for others. Of course the Fire weighs more (14 oz) and has color, unlike the base Kindle and Kindle Touch I’ve just described.

I sent several emails to Apple describing what I wanted in a 6-7 inch tablet, and why. But it seems as if they just forwarded my emails to Amazon.

And I’ve waited loooong enough for Apple, who may just lower the iPad 2 price, rather than build a device close to what I requested. So I’m probably going to get a Kindle or Kindle Touch. I wonder how many other tablet buyers have had similar thoughts.

zewazir

Apple has never been forced to join a market - especially one based on cheaper. Not all that long ago everyone was screaming for Apple to jump into the netbook market, the smaller, lighter, limited capability version of portable computers. Apple chose a different path - with market-shattering results.

Now, once again, people are wanting Apple to jump into a market niche because another company is - moderately - successful with a smaller, lighter version. I am certain Apple will do just fine while ignoring the Kindle Fire.

Tiger

Kindle Fire is becoming Kindle Ember.

Return rate growing, reviews anything but glowing.

So, is it a Kindle, or a candle?

Either way, it seems the spark is gone.

JonGl

I thought that million a week number was of all Kindles together, not just the Fire alone. The article you reference seems to say that (that Amazon doesn’t break down the numbers)

-Jon

Dean Lewis

Tiny screens on the iPhone. Ah, I remember back a long time ago when people were making fun of the size of the iPhone, with images of people awkwardly holding bricks up to their faces and drinking the kool-aid that the size is just fine. Now 3.5” is too small, and holding up even bigger phones to our faces is preferred.

Nice.

By the way, the weight of the iPad is about the same as a decent-sized hard cover book. Those sure were hard to hold for centuries. Maybe the large paperback weight of the Fire is better, but let’s not forget which book is designed to be thrown away and which is meant to be saved.

All that being snarkily said, I don’t think Apple needs to make a 7” iPad and get into the same app resizing issues Android has and causing confusion and dissatisfaction. And I truly hope Apple doesn’t return to the days of a bazillion indecipherable product SKUs which was a huge problem when Jobs returned in the 90s.

Shawn King

“Apple is being forced to Build a 7” Tablet…” WTF? “Apple is being forced to Build a 7” Tablet…” WTF?

BurmaYank

?. . . Time Cook expressed the feeling that it?s easier to lower the price on the iPad than to cut corners and upset the customer.?

“Can someone elaborate on exactly what he meant by that?? Does he mean that if Apple has to lower prices, they will just eat the lost margins and never try to recoup even part of it by using cheaper components?”

Since Apple’s margins on the iPad are so enormous (aren’t they around 50%?), thanks to Apple paying so much less than its competitors, with many enormous/billion-dollar cash purchases, for a component, and since Amazon consequently must either lose or make no money at all on every Kindle it sells, just to compete with Apple’s supercheap iPads, Apple could drive the Kindle out of the market simply by reducing the price $50 if competition gets too fierce from Kindles/Nooks, and then another $50 if competition is still too fierce, and then another $50 if it’s is still too fierce, and then another $50 if it’s is still too fierce…., etc., and Apple would still be making very nice profit margins on those discounted iPads.

Making competition even more disadvantaged, Apple also has frequently cornered the market on components with its billion-dollar cash purchases freezing out competitors’ supply-sources,

Therefore, Apple will not need to compete in the 7” tablet market with one of its own to maintain its dominence, unless/until Apple has discovered a good user-need reason (which is not a marketing-reason) for making one.

Since SJ’s 1998 resurrection of Apple, Apple has never created any products based on marketing-reasons; all products created were instead based on user-need reasons.  I think Steve would respond to this article’s suggestion with something in line with, “Cobbler, stick to thy last.

I think your idea is nonsense, John.

zewazir

“A million Kindles sold per week is evidence of Apple asleep at the wheel.”

I actually laughed aloud at this little statement.  Apple sold over 11 million iPads in the September, 2011 quarter. (http://profit.ndtv.com/News/Article/apple-sold-11-1-m-tablets-in-september-2011-quarter-idc-294208)  Now, while that is not a million a week, it’s darned close to a million a week. Being marginally behind a (much) cheaper item during Holiday sales, while maintaining a MUCH higher margin does not equate to being asleep at the wheel.

Besides, how many Kindles were purchased, not because of the smaller format, but SOLELY due to the smaller price? Again, Apple has NEVER competed purely in the cheaper market.

DB

Bwahahahahaha! Seriously? Are you offering a cash bet? If so, I?ll take some of that action. I don?t think you understand either Apple or its market.

Del Dryden

People I know who like their Fires use it mainly ONLY for reading. They’re really not using it as a tablet…in other words, it isn’t an ipad competitor, it’s just a prettier ereader, but Apple has never expressed an interest in making an ereader, dedicated or otherwise, so why would they start now?

I went with a Nook tablet when I replaced my Kindle keyboard and I like it a lot, use it for much more than reading (so I’m glad I didn’t go w/ a Fire); but I don’t consider it an ipad substitute, because it does different things. I wouldn’t really want an ipad that small, and wouldn’t want an ereader as big as an ipad, so…different functions, different form factors.

Every time someone says Apple is now “forced” to do this or that, it usually seems like that person has a fundamental misunderstanding of Apple’s philosophy. Apple isn’t hurting for the share of any market in which they care to participate.

iMan

Like they had to enter the Netbook field?  Millions were sold and yet somehow in their heart, Apple could take it upon themselves to compromise.

Tatlin

t?s just plain rare for a company to sit back and excuse itself out of a market and potential earnings

... The key point… Apple IS a rare company that has shown time and again that it can and will hold its nerve and position… Through developing the best of breed product… Not what the pundits THINK it should produce.

Plist

Apple once made a single sized laptop. Apple now makes an 11” laptop and a 17” laptop and more in between. People buy them all.

Why is so difficult for people to wrap their heads around the fact that different sized tablets and phones. What is so hard to understand about this.

Lee Dronick

It is going to be one of those we will have to wait and see things.

Speaking of waiting. I will have to give a Fire a spin before I settle on if the size fits and feels right before I comment on should Apple make one or not.

BurmaYank

”... since Amazon consequently must either lose or make no money at all on every Kindle it sells, just to compete with Apple?s supercheap iPads, Apple could drive the Kindle out of the market simply by reducing the price $50 if competition gets too fierce from Kindles/Nooks, and then another $50 if competition is still too fierce, and then another $50 if it?s is still too fierce, and then another $50 if it?s is still too fierce?., etc., and Apple would still be making very nice profit margins on those discounted iPads.”

If Apple decided to do that, it would not only be the Kindles/Nooks that Apple’s sequential price reductions would be driving out of the tablet market; all the other Android tablets would be strangled to death as well.

jkwilliams

FYI:
Just checked at gazelle.com and they’ll give you just over a $100 for a Kindle Fire in “Perfect” condition. That’s quite a discount for a very young device.

y3kbug

?. . . Time Cook expressed the feeling that it?s easier to lower the price on the iPad than to cut corners and upset the customer.?

Can someone elaborate on exactly what he meant by that?? Does he mean that if Apple has to lower prices, they will just eat the lost margins and never try to recoup even part of it by using cheaper components?

It means that they may do what they do with the iPhone now:

newest iPad @ $500, older iPad @ a lower price point.

This will be a hard balancing act however, as it must be low enough to where it keeps consumers off other devices, yet not so low that it undercuts the newest model.

Techslacker

Even a blind squirrel can find a nut once in awhile.

I would stake this as being similar as I think it’s possible that someday Apple will deliver a 7” ipad but not until the market and the technology behind it matures enough.

People with ideas like this typically fail to consider the big picture where other companies can change and adapt just as much as Apple. Should Apple begin to deliver a 7” ipad to compete on price you can bet your bottom dollar that other companies will have ways to further cut their prices. It would be a race to the bottom and Apple doesn’t typically compete in those races.

Also consider that Apple enjoys nice profits on the ipod touch line where there really isn’t much competition other than Nintendo and Sony. The ipod touch serves as a nice platform for kids to migrate to the very profitable iphone. An ipad that would compete anywhere close to the kindle fire on price would likely canibalize those ipod touch sales and likely cause a loss of profit as well as take consumers away from that path to the iphone.

The iphone is a great upsell for ipod touch users. When you’re running a business you don’t just throw something like that away.

ibuck

Dean Lewis:

By the way, the weight of the iPad is about the same as a decent-sized hard cover book. Those sure were hard to hold for centuries.

It’s not just the weight, but the awkwardness that’s key in reading.

I just weighed Dan Brown’s The Lost Symbol, and yes it does weigh more than iPad 2. But having spent a week with the iPad, and having read Brown’s book, I can tell you there’s no comparison. Open such a book, place your thumb in the center bottom and let it rest in your hand. It’s way more comfortable than the iPad, which for me always required two hands or a hand and lap to hold comfortably.

anovelli

Thankfully more reasoned analysis showed up. First real disappointment in an article from you John.

John Martellaro

anovelli:  I’m just trying to stay hungry, stay foolish.

Lee Dronick

I just weighed Dan Brown?s The Lost Symbol, and yes it does weigh more than iPad 2. But having spent a week with the iPad, and having read Brown?s book, I can tell you there?s no comparison. Open such a book, place your thumb in the center bottom and let it rest in your hand. It?s way more comfortable than the iPad, which for me always required two hands or a hand and lap to hold comfortably.

Yes, it is too easy to accidentally trigger a touch screen action while holding an iPad. I would like an even larger margin on my iPad than what we have now.

Doug

What has the same price as a Kindle Fire, the same resolution, better specs, the build quality of an Apple product, runs most of the Apps that the iPad runs, has better support and more accessories?

It’s the iPod Touch and shouldn’t be overlooked

Bill Murphy

So,this weekend, I had a chance to show the iPad2 to my wife for the first time.  She can’t operate the small iPhone or iPod Touch due to the small size and a tremor that she has.  BUT, the iPad was too large for her to want to carry in her purse.  A 7 inch Pad would be ideal for her.

Maynard Handley

People I know who like their Fires use it mainly ONLY for reading. They?re really not using it as a tablet?in other words, it isn?t an ipad competitor, it?s just a prettier ereader, but Apple has never expressed an interest in making an ereader, dedicated or otherwise, so why would they start now?

And yet, without even trying, Apple makes BY FAR the best e-reader for anyone who has to read TECHNICAL material.
Most technical material comes as PDFs—- it needs a way to display correctly formatted mathematics along with graphs and diagrams—- and none of the epub formats are even close to adequate. And PDFs need a 10” or so sized reader—- 7” is way too small.

Throw in by far the best eReader apps for handling PDFs and a large amount of technical material. My personal choice is GoodReader, but people in other fields like Papers, while the comic reading crowd have their own favorites.

Add that iPad provides the best tablet browser experience, for finding those PDFs, or for reading technical HTML pages.
Add that next year we’ll get a double-density screen, improving on what is already the best screen in this space.

Look, if you what you read is novels, then fine, maybe Kindle serves your needs magnificently. But the universe of readers is larger than the universe of novel readers—- and Apple serves the non-novel reader pretty damned well.

Jay

Like most others here, I think the author is neglecting his historical perspective of Apple - since rebounding from the death spiral, they’ve never moved into a market (or segment) as a defensive move:

iMac, Mac OS X, iPod, iTunes, iPhone, iPod touch, iPad. None of these things were done as a defense against someone else who was threatening territory. In fact, by killing off products (notably the printer business) they actually ceeded the business (what’s left of that business anyhow). You could argue iCloud is a defensive move but I think it’s just more of a natural progression of content delivery.

If they ship a 7” tablet it will be because they found a way to make the value proposition to customers. I personally doubt it’s going to happen but I don’t have the same kind of product focus that Apple does.

chet everett

The logic of there being different sized laptops is completely different than the saying Apple would be wise to “splinter” the application base of the iPad through offering different form factors.

Apps for laptops generally run at the native resolution of the device and the APIs make it easy to resize for the available screen. That is not the case for either iPad apps nor those of competitors in the Android OS space—games and such that work well on the large screen of the iPad would look cramped on a smaller screen.

As it is, the rare app that was originally designed for the the smaller iPhone then “inflated” to fit the iPad generally looks junky compared to those designed natively for the larger screen…

Plist said on December 19th, 2011 at 5:25 PM:

Apple once made a single sized laptop. Apple now makes an 11? laptop and a 17? laptop and more in between. People buy them all.

Why is so difficult for people to wrap their heads around the fact that different sized tablets and phones. What is so hard to understand about this.

1stplacemacuser

Apple must not manufacture a 7-inch device to meet opposition.  That’s tantamount to acknowledging a business mistake.  It’s better to discover a new, presumably smaller, form factor for a new iPad-like product that will meet a new marketing niche, but at the same time can eat into the existing market niche that the Kindle Fire holds.

That is, instead of building a 7-incher to compete directly with the Kindle Fire, Apple should build a 6.5-inch device, but has features that supposedly meet a new market niche, but can be easily adapted to meet the Kindle Fire market.

The CW

yeah, wrong.

first, show me the proof that kindle is recording sales that are even close to threatening the iPad’s dominance. second, show me the profit numbers compared to those of the iPad. apple does an enviable job of siphoning the cream of the customers off the top and leaving the ill-informed, noisy, critic-boys to the rest.

John C. Welch

From the TMO article you quoted John:

“While Amazon didn?t break out individual numbers for each Kindle device, the company did say that the, ?Kindle Fire remains the #1 bestselling, most gifted, and most wished for product across the millions of items available on Amazon.com since its introduction 11 weeks ago.?

So you don’t have any actual proof of the Kindle FIRE selling 1M/week, just *kindles* selling on that level. Yet, with no proof, you say Apple will be forced to react.

Um…there is a difference between “staying foolish” in the “don’t be afraid to look silly” way and “being a damned fool”.

Lavode

Any megacorp can sell a product below the cost of materials just to force its way into the market, but are the customers going to be happy with that product when it offers an inferior performance?  Granted there will be some who just don’t care and want the inferior product, but in general, Apple’s strategy has paid off.

ibuck

Tis the season to be jolly, peace on earth, goodwill to men. Is this what’s happening in these comments?

One said:  Thankfully more reasoned analysis showed up.

Another said:  yeah, wrong.

Another referred us to a misanthrope web page that excoriated Martellaro (who used to work at Apple) for expressing his opinion and said:  “It?s easier and smarter to argue facts, data, logic and concrete information.”

There’s no evidence anyone here has the concrete info desired (either Amazon’s sales or Apple’s strategy or product plans), yet there are a lot of posts here that sound like made-up minds. Apple’s done a lot of things they said they wouldn’t and many thought they never would (Intel, iPhone, tablet). How can you be so sure, especially with the dearth of “concrete info” available? Let’s all chill, then wait and see. And Happy Holidays!

alex555

Ah, armchair quarterbacking: if Apple had done something differently, maybe they would be doing better than merely the most valuable company in the world right now!

This has been fun ever since the last tech bubble, when people laughed at that moron Buffett for not investing in computers, making him (on a bad day) merely the second-richest man in the world.

Compared to Amazon, Apple has twice as many employees, triple the revenue, and $100 billion more cash in the bank.  They own over 80% of the tablet market, and the iPad division is certainly profitable on its own.  What possible reason could they have for needing to respond to anything that Amazon does?

It’s not just that they shouldn’t.  They couldn’t.  A new tablet form factor would take months or years to move through the pipeline.  If they released a 7” tablet, it couldn’t really be in response to a competitor’s tablet.  There’s just too much lag time.  They’re no doubt polishing the iPad 3 right now, and have already started on the iPad 4 and 5.  They’d only introduce a new form factor if it was strategic, and there’s nothing to indicate that it would be.

Besides, Apple already has a smaller $200 tablet.  It’s called the iPod Touch.  It’s selling like hotcakes, nobody else has anything like it, and it even has better reviews on Amazon.com than Amazon’s own tablet.

Mike Schwab

I have expected the eventual release of a 7” iPad since iPad was announced.

One of the major reasons we haven’t seen one is because it would add another resolution for apps to support.  However, the API has taken some major steps towards resolution independence.

Retina display technology suggests that the next iPad will have double the resolution of the current iPad.  Maybe if this resolution can be brought to a 7” screen with a different form of retina display, or perhaps 3D, that’s when we’ll see the 7”.

Another possibility I suspect is that we’ll see a folding or roll-up screen.

Dave Hamilton

This is one of those times where I agree with Martellaro’s premise, and frankly I think a lot of the commenters here are being extremely short-sighted and just listening to what another pundit out there claims instead of thinking for themselves.

I’m also curious how many of the naysayers have actually touched and used a Kindle Fire? I have, and no, it’s not as good as an iPad, and no, it won’t compete with the iPad on many levels. But the concept of having a tablet that one can comfortably hold in one hand is huge, and is something this particular Apple fan would LOVE to see in an iOS device. Once the screen technology is available to support the required resolution at this 7”-ish size, I think Apple will be seriously considering something like this to stay in this market.

Remember, this ain’t Steve at the helm anymore. Apple’s leaders are people that are working for their money and likely not able to ignore the market as much as Apple used to. In THIS case, I think that’s going to be a good thing.

Ross Edwards

My wife and I have long been fans of the e-ink Kindles, and we also have an iPad 2.  The e-ink screen is the killer app for an e-reader.  Frankly, though iTunes/iBooks is an order of magnitude better for organizing and syncing a book collection, we rarely read ebooks on the iPad for the simple reason that the e-ink screen on our Kindles is much better suited to the task.  It is clear, easy on the eyes, and the battery time is measured by a calendar, not a clock.

The Kindle Fire?  We’ll pass.  We already have an LCD tablet that works much better thankyouverymuch.  I suspect the sales of e-ink Kindles, especially now at eighty bucks a throw, make up a bigger portion of that million-a-week brag than Amazon wants to admit.  And this scrutiny is coming from a satisfied customer!

aardman

I’m still on the fence about whether Apple comes up with a tweener pad.  But I am pretty sure that Jony Ive and his oompa-loompas are cranking out prototypes at this very moment to see of there is a way to do a 7 incher that is worthy of the bitten fruit logo.

The thing about Apple is they hold fast with their convictions until they prove to themselves that they are wrong.  Then they pivot like a wind-up ballerina on a music box.

No doubt, the market intel about the Kindle Fire has got them revisiting their assumptions and conclusions.

One thing for sure, if a tweener iPad comes out, it won’t be as cheap and shoddy as a Fire.  It won’t be merely a scaled up Touch or a scaled down iPad.  It will have it’s own set of precisely defined functions, just like Steve methodically laid out for the iPad when he announced it.  So the task that Apple is probably deeply engaged in now is to determine if there is a set of functions above the Touch and below the iPad that actually has a viable market which doesn’t encroach too much on the Touch and the iPad?

jsbow-long

John, John, John ... What have you been up to? This sure seems like “Click bate.” Notkatsu has it! Negative profit margin.  Just the thing, John. Apple sure has to worry about that.

Maybe, just maybe in a year or two when Amazon has enough product flow to bring the cost down, they will start to make a profit. For now they want to sell media/content and “blow off” the hardware profit.  But then they have this business model that says “sell for next to nothing until the customers stop paying attention to what Amazon’s competition is charging and then rise the price to make a profit.”

John, let’s just see. OK?

skipaq

As I posted early on in this thread; I too believe Apple will eventually release an iOS device between the Touch and the iPad. They won’t do this because they have to do it or because Amazon has forced their hand. They will do it because there is a market for such a device. It will be priced to maintain Apple’s margins.

Apple has been working on tablets in this size range for years. It is not like they are starting from scratch. What was described as not what Apple wanted to do three years ago will not affect decisions that need to be made today. Tim Cook each day reveals himself to be thinking different from Steve Jobs on some things while staying true to Apple’s core values.

doug

Great topic!  Just a data point for y’all: We have bought two Kindles (e-ink ones) in the last 5 months; one is the new $79 one.  Frankly they are great products, both of them.  First non-Apple gizmos I have ever seen that I would say that about.

The iPad seemed too big (and heavy and expensive and battery-intensive) for just an e-reader, and that was what we wanted it to do.  There would be a market for sure for a smaller, lighter, pocketable iPad (or a bigger Touch.)  Just not the dedicated e-reader market.  That market Amazon has wrapped up, at those prices, with their store tie-in.

RonMacGuy

As of right now, the Kindle Fire has 791 1-Star reviews out of a total of 6,847 reviews.  This is almost 12%.  I can’t imagine many 1-Star reviewers keeping a product.  So, assume most 1-Star reviewers are returning their Fire.  That’s > 10% just from this group.  Add to that some of the 582 2-Star reviewers and 792 3-Star reviewers returning their products.  Easily double-digit return rate.  One third of reviewers think the Fire is average or below average.  Sure it shows an average 4-Star rating, but 20% give it a 1- or 2-Star rating, which in my opinion is terrible.  I suspect the Fire is starting to diminish…

RonMacGuy

Oh, and I suspect right after the holidays we’ll see some nice pricing on “refurbished” Fires (i.e. returned Fires) priced at $130-$150 to try to move them.  Losing money on each at $199, add to that the hassles and cost of dealing with the returns, testing each return, re-certifying them, and selling refurbished at an even lower cost, and it makes it harder to make money on them.  Better sell a lot of content!!

Lee Dronick

Remember, this ain?t Steve at the helm anymore. Apple?s leaders are people that are working for their money and likely not able to ignore the market as much as Apple used to. In THIS case, I think that?s going to be a good thing.

Yes we may see things that Steve would never allow and that might take Apple to new heights, or, it could slide into mediocrity if the bean counters take over decision making.

Dirt Road

I have an iPad (1) and a Kindle 2, the latter being close to that 7” tablet size. I’ve found that it’s an awkward size, not much more portable than a full-sized iPad. An iPod touch fits comfortably in a shirt pocket, an iPad fits comfortably in a netbook case. I guess a 7” tablet would fit in a purse, but most guys don’t carry one and that’s an environment ripe for screen & bezel scratching.

So if one looks strictly at usage, there’s not much call for a 7” tablet. Price and perception are powerful drivers, though. I’ve found Amazon’s support to be on Apple’s level, so if Amazon sticks to their guns they might just get through this initial rough patch.

Berie G W. ooster

‘FORCED’? - me thinks not dear Jeeves.
No, Apple is ahead of the curve and that’s where it will stay.

ErickP

You’re a funny dude John, it’s not even April 1st and you’re trying to punk everyone that you are actually serious about the words you wrote. Wonderful piece of trolling. Thanks, for the chuckle.  wink

PS-> I see LOTS of comments and yet, you choose not to defend your point of view. Grab your Xxxxx and let them have it!

SamIAre

Apple once made a single sized laptop. Apple now makes an 11? laptop and a 17? laptop and more in between. People buy them all.

Why is so difficult for people to wrap their heads around the fact that different sized tablets and phones. What is so hard to understand about this.

You’ve never been a developer/designer, have you?

Apps on a desktop OS are in windows, which are resizable by nature, and therefor the layouts and image resolutions are very forgiving and flexible. On phones and tablets the app takes up the exact space of the window, meaning image size and resolution, and layouts have to be exact down to the pixel.

I understand why you’d think it’s essentially the same, but trust me when I say it isn’t.

Shawn King

This is one of those times where I agree with Martellaro?s premise, and frankly I think a lot of the commenters here are being extremely short-sighted and just listening to what another pundit out there claims instead of thinking for themselves.

Agreed except this time, the “pundit” in question is Martellaro.

And are you *sure* you agree with the premise? That is, as Martellaro claims, Apple will be *forced* to sell a 7” tablet in order to compete n the low end with the Amazon Kindle Fire? Is that what you are agreeing with?

Because that’s the part that many of us argue is ridiculous.

nealg

For me, a 7 inch tablet is too small for my taste. I played around with the Nook and thought the screen size was too limiting after having used an iPad for close to 2 years now. But that is just me.

I don’t thing that Apple will be forced to do anything in the short term. If they feel that they can put out a compelling tablet that is useful at 7 inches, I think they will. I think it will cause some problems for some developers giving them a different screen resolution to develop for but it will come down to the user experience for Apple.

In the long term, Apple may be “forced” to come up with an in between type of product. But for me, let us see what kind of staying power the 7 inch tablet really has in the market. It may be that people don’t really want a 7 inch tablet but want a cheap tablet. If that is the reason the Amazon Fire is selling, then the size of the tablet may not matter.

As always, time will tell. Definitely a thought provoking piece. Thanks John.

Neal

Shawn King

Another referred us to a misanthrope web page

That would be me.

Tis the season to be jolly, peace on earth, goodwill to men.

We’re supposed to just ignore wrong, wooly headed thinking because of “the season”?

that excoriated Martellaro (who used to work at Apple)

So? Does working for Apple 10 years ago provide some sort of magical insight into the actions of the company present day? If so, great because I used to work for them too. But I can tell you, that means diddly in the present day and with this present discussion.

There’s no evidence anyone here has the concrete info desired (either
Amazon’s sales or Apple’s strategy or product plans)

LOL Absolutely untrue. Amazon themselves announced sales figures last week. Martellaro got them wrong but that doesn’t mean they don’t exist.

Apple’s done a lot of things they said they wouldn’t

Agreed and no one is arguing against that. The point we *are* arguing is is the one Martellaro makes in the title and body of this piece - that Apple is now being “forced” into making a 7” tablet. Many of us think that is ridiculous and Martellaro provides no facts to back up his opinion.

JonGl

John ends his article thusly:

My experience is that Apple execs will become a little touchy about the loss of tablet market share and the unflattering conclusions analysts will draw after the holidays. How and why Apple responds will tell us a lot about how the executive team is feeling about how to compete in the tablet market. My money is on a smart, agressive response instead of no response at all. The fire must be put out soon.

Not sure how you guys interpret this, but I don’t see any cause for the rhetoric that is coming from some quarters—Shawn King in particular.

I almost wonder if you guys read to the end before you formed your opinions, or worse, wrote what you wrote.

For the record, not discussed here, but in other places, one rumor is that Apple is looking to use a 7-something inch tablet with the same resolution as the current iPad. It may be closer to 8”, but still, it is a smaller size, without changing pixel resolution. Can anybody call this irrational? short-sighted? a knee-jerk response to Amazon? I think this is the sort of thing John is talking about. BTW, I had the same initial reaction most people posting here did, but when I reread the article, I got a different impression. Certainly most of the negative responses have been less-thought-out and far more of the knee-jerk response they are ostensibly complaining about. wink

-Jon

And P.S. I don’t really care either way. It’s all speculation which ever side you take. Only the higher-ups at Apple truly know what’s coming down the pike, so I’ll content myself with waiting.

Lee Dronick

For the record, not discussed here, but in other places, one rumor is that Apple is looking to use a 7-something inch tablet with the same resolution as the current iPad. It may be closer to 8?, but still, it is a smaller size, without changing pixel resolution. Can anybody call this irrational?

It may be for something other than a small tablet. Maybe it is a remote control and content ordering gadget for an Apple TV, or something else we can’t even imagine at this time.

Shawn King

I don?t see any cause for the rhetoric that is coming from some quarters?Shawn King in particular.

Then let me be more clear. Martellaro’s facts are incorrect. He uses those facts to base his opinion on. Therefore, his opinion is wrong.

He claims Apple will be “forced” to answer the Kindle Fire “threat” by selling their own 7” tablet - yet there is no demonstrable threat from the Kindle Fire and, as many of us have pointed out here and in other forums, Apple has never responded to the low end of the market in the way Martellaro is saying they will be forced to.

In short, the column makes no sense. I hope that clears things up for you.

one rumor is that Apple is looking to use a 7-something inch tablet with the same resolution as the current iPad. Can anybody call this irrational? short-sighted? a knee-jerk response to Amazon?

Yes - as it is a rumor with no basis in facts, it can be called all of those things and more.

SamIAre

one rumor is that Apple is looking to use a 7-something inch tablet with the same resolution as the current iPad. It may be closer to 8?, but still, it is a smaller size, without changing pixel resolution. Can anybody call this irrational? short-sighted? a knee-jerk response to Amazon?

That would be a pretty terrible solution. Same resolution on a small screen means all the UI elements get reduced by that much. Buttons would be harder to accurately tap and text would be harder to read.

zewazir

Not sure how you guys interpret this, but I don?t see any cause for the rhetoric that is coming from some quarters?Shawn King in particular.

I almost wonder if you guys read to the end before you formed your opinions, or worse, wrote what you wrote.

Actually, it seems most of us DID read to the end, and the premise of the counter arguments are what are being misinterpreted. Statements such as “Apple execs will become a little touchy about the loss of tablet market share” or one I commented on earlier ?A million Kindles sold per week is evidence of Apple asleep at the wheel.? are what we are disagreeing with.  There is no indication that Apple is losing anything. For one thing, the sales figures for Kindle are for ALL Kindle sales, but the article acts as if they were only the Kindle Fire. When you’re trying to look at $79 units vs. $499 units, you’re immediately on bad footing in an apple to oranges (is there any way to avoid that pun?) kind of way. There is serious doubt - at least in my mind - that people who choose the $79 basic Kindle would purchase an iPad were the Kindle not available.  Frankly, the same can probably be said about the Kindle Fire. The idea that Kindle is taking market share from Apple is the idea we disagree with, because where the rubber meets the road, the Kindle and Kindle Fire are in a market slot that Apple has traditionally - as well as very successfully - left to others to fill. And as such, that Apple needs to “do something” BECAUSE of the Kindle market is also in error.

If Apple chooses to put out a smaller tablet, it will (should be) in response to an established market for that size of APPLE product, not because someone else is selling a in that size which, due to price and functionality, cannot truly be compared to the iPad anyway.

Lee Dronick

Will Amazon be forced to build a 9.7” Kindle Bonfire?

http://www.marco.org/2011/12/19/amazon-kindle-vs-ipad

anovelli

I?m just trying to stay hungry, stay foolish.

LMAO… great response. Have great holidays smile

Justin

No way will you see a 7” iPad in the next year or so. Just isn’t going to happen. It should be obvious why. I don’t know why the premise was accepted without a real explanation since no one is in a position to force Apple to do jack s***.

Fire seems to be putting itself out, BTW.

Garion

(double post due to upload issues removed)

Garion

Apple is “forced to build a 7 inch tablet” in the same way they were “forced to build a netbook” about four years ago. That is: not at all.

ibuck

“According to Chinese manufacturers, Apple is buying up 7.85” screens for this upcoming mini iPad.”
- MacRumors

Shawn King

?According to Chinese manufacturers, Apple is buying up 7.85? screens for this upcoming mini iPad.?

LOL I understand that some folks think a rumor is something to base facts on but it really isn’t. It’s even worse when you look at the rumor’s source.

I’ve been tracking rumors over at Stupid Apple Rumors for quite some time. As of the last accounting, MacRumors has published 50 rumors with five of them being original to the site - only one of them has come true…And to make matters worse, MacRumors’ “source” on the above quote is the notoriously sketchy Digitimes web site.

So take your “According to Chinese manufacturers” with a HUGE truckload of salt.

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