Apple’s New iPads Set to Crush the Competition

| Ted Landau's User Friendly View

I've seen the future…and it is filled with iPads. In two sizes. Original and mini.

With today's iPad announcements, Apple has laid down the gauntlet in the tablet wars. In my view, barring a few small but significant exceptions (and I'll get to them in a moment), there is no reason for anyone to buy a tablet that is not an iPad. I expect Apple to to crush the competition this holiday season.

I had suspected that Apple would update the 10-inch iPad today by adding a Lightning connector. But I figured that would be it. While the new fourth generation iPad does include the Lightning adapter, it surprisingly offers even more. It ups the ante with an A6X chip that promises to be "up to twice as fast" as the chip on the older (no longer new) iPad. As a bonus, the new iPad offers an improved front-facing FaceTime HD camera and faster Wi-Fi performance.

The iPad mini, of course, features a smaller size and 7.9-inch display (which is not a Retina display). It sports an A5 processor but otherwise has specs almost identical to its larger sibling.

There is nothing about these two new iPads that is groundbreaking. In fact, as best as I can figure, there is not one thing you can do with the newer iPads that you couldn't do with the older model (except easily hold the iPad mini in one hand).

Nonetheless, I believe today's announcements represent a potentially game-changing event for Apple.

First, Apple has shown that it's willing to update iPad models on a 6 month cycle, rather than the yearly upgrades we have been seeing. This allows Apple to respond more effectively to the rapid pace of technological improvements and arrival of new competition. Having new iPads just before the holiday season will spur sales on by itself, but should additionally stave off a reluctance to buy an iPad because you want to wait for a new one with a Lightning connector next year. There isn't another tablet on the market as elegantly designed or with as many useful apps as the iPad. I see no reason that the 10-inch iPad will not continue to dominate the competition in its size category. [Note: I have not included Microsoft Surface tablets in my considerations here, as it is too early for me to assess their effect.]

With the smaller iPad mini, Apple plants a flag firmly in the middle of this market. As Phil Schiller ably demonstrated at the media event, the iPad mini is overwhelmingly superior to its Android competitors. I was especially impressed with the comparison that showed how an iPad mini was a bit smaller overall than an Android tablet despite the fact that the Android had a smaller (7-inch) display.

I was also glad to see (as I had predicted) that the mini will run all existing iPad software — and look good doing it. Speaking of predictions, I missed the mark when I said there would be no rear-facing camera — but pretty much nailed everything else. While there were no new book reading features specific to the iPad mini, Apple did announce a new version of iBooks — featuring continuous scrolling of text — for all iOS devices.

Based on a tech specs comparison, a hardware design comparison, and a software comparison — nothing compares to the iPads. And now, whether you want a big one or a small one, you have a choice.

As I see it, there are only three reasons why anyone interested in a tablet would not get an iPad at this point:

• You want an bare-bones e-ink reader. In that case, you want something like the $120 Kindle Paperwhite. Of course, many people (myself included) have both a Kindle and an iPad. So this needn't be an either-or decision.

• You don't like the Apple eco-system and don't want any product made by Apple. Period. There's nothing I can say here. Expecting this to change would be like expecting a member of the Tea Party to support Obama.

• Price. This is the big one. The iPad mini starts at $329 for 16GB. The Google Nexus 7 tablet, with a 7-inch screen and 16 GB storage, sells for $250. Other competing tablets sell for less than $200. For those whom price is a prominent concern (and this is a sizable group of customers), the price difference could be a deciding factor in favor of Android. This, more than anything else, will allow the competition to stay in the game.

Fortunately for Apple, price is something that can be easily adjusted. You don't need to ship new units from China to do it. I'm sure Apple is on top of this. If they come to believe that it would be to their financial advantage to lower prices, they will. For now, it's wait and see.

Speaking of price, the entry level iPad mini is just $30 more than a new 32GB iPod touch. I believe this is enough of a separation to sustain the iPod touch as a viable alternative, especially for those who prefer a pocket-size iOS device. Again, we'll have to wait and see how it shakes out.

Bottom line: In terms of market competition, Apple enters the critical holiday season with the best line-up of iOS products I have ever seen. I will be shocked if the financial results for the next quarter are anything other than spectacular.

A few words about Apple's other announcements

The new iPads were the highlights of today's announcements. But there were also new iMacs, new Mac minis, and a new 13" MacBook Pro on the menu. From all that was announced, here's what stood out the most for me:

• The iMac no longer comes with an internal optical drive. This means that the optical drive is missing from the iMac, the Mac mini, the MacBook Air, and the MacBook Pro with Retina Display. The message could not be clearer: As far as Apple is concerned, optical media are dead.

• The Fusion drive looks to be the drive of the future. Apple has taken an SSD and a traditional hard drive and combined them into one unit. Going a step beyond, via software, the Mac can shuttle apps back and forth between the two types of drives, making sure that your most frequently used apps are always on the SSD. It's currently available for the iMac and Mac mini. If it performs as good as it sounds, I expect this will be the default choice on all desktop Macs — and an option on MacBook Pros — within a year or two.

• The new iMac is incredibly thin (although it does get thicker as you move towards its middle). At some point, Apple's products won't be able to get any thinner. I wonder if I'll live to see that point.

• iTunes 11 is not yet here. But Apple is still promising its release before the end of October.

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Comments

archimedes

The $329 price point really does seem like a loser compared to Google/Amazon’s $159-$199 minimal-margin pricing.

However, I have no doubt that Tim Cook is introducing it at the price designed to maximize Apple’s billions and sell every last unit they can manufacture.

The $299 iPod touch doesn’t seem inspiring if you can get the iPad Mini for $30 more, but then why not move up to the iPad 2? Of course, why get an iPad 2 if you can get an iPad 4? wink

Ultimately I think the strategy is for Apple to take every single dollar that you can spend (unless you are set on a tablet and only have $159)  and that’s probably a good strategy.

Todd Eifert

The real problem with the mini is the width.  It won’t fit in a back pocket.  The Google Nexus 7 will barely fit with a thin case, that extra width will prevent the mini.  Having used both iPads and full sized Google tabs, I find the Nexus perfect precisely because I can carry it around so easily.

geoduck

Be the top dog…yes
Be the one people lust after…yes
Be the big tech item this Christmas… yes
Crush the competition…no

At $249 16Gb $349 32Gb they would have crushed it. Apple would have owned the tablet world for the next decade and would in the long run have made more money. At $329 16Gb $429 32Gb it’s like a Mercedes. Lots of people want it but few can afford one so they settle for the cheap imitation from someone else. I can see a lot of people saying “Oh gee thanks :| ” this Christmas when they get something else that is “just like the iPad Mini but in our budget”.

iJack

The iPad mini pricing (I am a little disappointed) notwithstanding, I think today’s product announcements were a triumph for Apple.  Quite frankly, I am still reeling, even though I have no plans for Apple purchases.  They showed top-of-game form across the board.

Almost.

No mention of the Mac Pro, which I have come to believe – given the new specs for the iMac and Mac mini – sound the death-knell for the Pro.  They’ll figure out a way to stack Mac minis for those who need servers or render-farms, and leave the rest to figure out what many of already have, that the iMac is plenty good enough for most of us “pros.”

aardman

Excellent point archimedes.  A lot of people will look at the price of a product and consider only the demand side.  If the iPad mini is priced as $249, Apple might very well crush the competition PROVIDED they are able to produce enough to supply the market at that price.  But if they aren’t able to keep up with demand, then setting a lower price just has them leaving money on the table.  Since I don’t think Apple is run by a bunch of morons, I would conjecture that the $329 base price was set after due consideration of their ability to crank out iPad Minis.

rwahrens

aardman,

By setting the iPad mini at the higher price point now, it allows them to kick off with less demand than would be the case at the lower price point.  As the manufacturing ramps up and initial demand is met, a later examination could allow them to lower the price to increase demand.

win/win.

skipaq

Think a year down the road when the mini 2 is announced. There well could be a $229-249 price on today’s mini. Another thing that would help is a slightly lower price point on the touch.

I thought the lowest price that would have been announced yesterday would be $299. What was announced is about what was expected. Furthermore, why does the competition need to be crushed? Competition is good. It is especially good when the most profitable market slice is owned by Apple. Let the others scramble about for the crumbs.

geoduck

Ran across a great article from Forbes that distils all my criticisms of the iPad Mini far better than I could.
http://www.forbes.com/sites/ewanspence/2012/10/24/tim-cook-blinked-first-the-nexus-7-took-pride-of-place-at-the-ipad-mini-launch/

FlipFriddle

I still think they blew it on price. I’ll be happy to be proved wrong, but I’m still with geoduck in thinking the opportunity existed to eliminate Android and Kindle as viable tablet alternatives with an aggressive price, profitability be damned. Lowering the price later because of slow sales is merely admitting it was wrong in the first place. Apple wasn’t aggressive enough in my opinion. They have the momentum and products to kill off the tablet segment’s competition the same way they did MP3 players.

Carsten Legaard

Chrushing competitors. When did that become the mission of Apple Inc.?
I thought is was about satisfying customers.
Not that their products have been overwhelmingly satisfying lately ...

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