Target Market for iPad mini: Those Who Can Afford it

| Particle Debris

Apple’s understanding of the target market for the iPad mini has to be a complex process. But it surely involves a keen understanding of the competitive environment and what strategies competitors will use. Now that we’ve seen how some tablets have failed against the iPad, new strategies are emerging. That, in turn, dictates Apple’s response.

The current thinking amongst the Apple acolytes, as I understand it, is that the pure tablet metaphor is what makes the iPad so successful. The whole design philosophy of the iPad, its iOS, the gestures, dispensing with a physical keyboard and a need for a stylus, is that we want to move away from the encumbrances of the classic PC. Simplicity and security supported by an extensive product infrastructure (books, music) reigns supreme.

Some companies have tried to take Apple on directly. For example, the HP Touchpad and Motorola Xoom didn’t have the infrastructure. Next generation competitors are taking a better approach. The Amazon Kindles are focusing on infrastructure and a handy size for book reading. Microsoft is focusing on business and leveraging the appeal that it has had in the past for MS Office and Windows. Hence, the more visible need for a keyboard. Google is combining the opening Apple previously left in the 7-inch size with its own product infrastructure, Google Play.

So if you’re an Apple executive, it’s all about sizing up, like a chess player, where the threats are likely to come from and designing new product strategies to meet those threats. That goes a long way towards explaining the design and pricing of the iPad mini and the brisk emergence of the iPad 4 -- which has angered some customers. (See below.)

Where does education come into all this? Perhaps not so much. And with that, I have several stories below in the Tech News Debris that shed some light on the whole affair. It gets very interesting indeed.

Tech New Debris

With Apple’s product announcements and the earnings report, there was a lot going on this week. Some of the technical news debris was related to all that, but some was, as always, off the beaten path. Here we go...

I’ve seen a bunch of reviews of the Microsoft Surface. They’re easy to find. But from the perspective of the Mac customer, you can’t do better than see how David Pogue reacted over at the New York Times. Sleek Tablet, but Clumsy Software.”

On the other extreme, if you want a really deep review, you also cannot do better than AnandTech. “The Windows RT Review.” An awesome piece of work by Vivek Gowri and Anand Lal Shimpi.

Regarding Apple’s announcement of the new iMacs, it’s always good to get a refresher on the Core i5 and i7 series, especially the differences between the desktop and mobile versions. For example, I consider Intel’s Hyper-threading to be an important feature to look for, and Andrew Cunningham points out: “There is no Core i5 desktop processor with Hyper-threading.” And that’s reason enough to always go for the i7 in an iMac. Here’s the full background at ars technica , “Core i5 or Core i7 -- does your computer need the extra juice?”

If I had the time, I wanted to write this next article. But Sascha Segan beat me to it and was probably more charming than I could have been. Highly recommended, not just for the content, but for Mr. Segan’s delightful wording: “Why Angry iPad 3 Owners Are Being Stupid.

Thanks to the U.S. Supreme Court, the very traditional and useful “first sale doctrine” does not apply to ebooks. (The first sale doctrine says that you, as first purchaser of any physical product, have the right to, in turn, sell it to someone else.) As a result, “You Don’t Own the Books on Your Kindle.” Or, I surmise, ebooks on your iPad and iBooks for that matter.

By now, you must have seen Apple’s winsome iPad mini commercial with the song “Heart and Soul.” What makes the ad so cool is the subtle reference, perhaps, to Tom Hanks and Robert Loggia in the movie Big, as they dance to that tune on the giant keyboard in FAO Schwarz in New York. Homage.

 

 

Naturally, there is always room for a little playfulness with that kind of ad, and who better than Conan O’Brien to do it? “Watch Conan’s Parody of Apple’s First iPad Mini Commercial.”

Think about those kangaroo pockets that doctors have on their white lab coats and you’ll realize the iPad mini may just be the perfect size. And it’s not just doctors. Pilots and soldiers may also find the iPad mini perfect for those oversize cargo pants pockets. Here’s the glimmer of things to come: “Why physicians will prefer an iPad mini: It’s pocketable.”

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My readers may have concluded that I am passionate about children, education and the opportunities that the iPad present. Of course, in accordance with the current thinking by some that money is more important than anything, Forbes makes the suggestion that the prospects for the iPad mini in education are secondary. Advertising, rather, is the key. (Sorry, I had to point this article out. I didn’t intend to get you feeling ill.)

The one interesting thing I did see in that article was that Apple may have perceived that competitive pressures in the future, from all sides, may have dictated the design of the iPad mini such that the educational prospects fell to the bottom of the list. Or dropped off completely. If so, that’s so very sad.

But there’s more.

Also at Forbes, there is an interesting analysis by Panos Mourdoukoutas who suggests that there are market forces that will cause Apple to lose the tablet war. While none of us really believe that, there is one tidbit on analysis that intrigues me, namely that if you take Apple on directly, you’ll lose. However, if you hammer away at Apple’s strategic weaknesses, you can make a living. Here’s the salient quote:

The bottom line: The tablet market is rapidly becoming a fractionalized market whereby different tablet models become hardware and software ‘bundles,’ serving different segments. This means that Apple has to give [sic] battles on many different fronts — where the attackers have an edge. That’s why it will lose this war.”

What he’s saying is that if Apple stops building the very most expensive, premium tablet and tries to compete in any one segment, the iPad product line will get fragmented. Conversely, the sum of the competing, fragmented markets will be enough to dissolve Apple’s top ranking in market share. So Apple has no choice but to maintain its premium product philosophy. Phil Schiller's passion is, in fact, a necessity.

Amazon proved last Christmas with the Kindle Fire that sub-markets, not covered by Apple, are ripe, and other companies are likely to use the same strategy.

For the sake of completeness, here is some additional commentary on the prospects for iPad mini in education. The gist of all these articles, taken together, is that education, especially K-12, is just going to have to make do, pick the most affordable products, and muddle through. The overall tablet market is so heated right now that schools cannot expect any one tablet maker to do anything but pay lip service to education, advertise some wins and offer tempting discounts. Then, take it from there.

 

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7 Comments Leave Your Own

mhikl

Ted, the ‘afford’ factor is complex. I polled a number of PC and Mac friends a while ago and the Mac group have owned far fewer Mac computers than PC guys have purchased PCs. Why replace what ain’t broke goes long way to keeping pockets full. (May have read that in a Chinese fortune cookie at some time.)

Isn’t Panos Mourdoukoutas’ postulation a possible entry to the ol’ Apple Death Kneel count?

iJack

“While none of use really believe that…”

While that is clearly a typo, it made me wonder if John is a closet Noo Yawker, and what he really meant to write was, “While none of youse really believe that..”

Terrin

For such a sharp and intelligent writer, I still fail to understand why you operate on the premise that the iPad Mini’s price tag of $329 is a hurdle to adoption in education.

You completely ignore the fact that Apple 1) gives schools undisclosed discounts for bulk purchases, 2) gives schools discounts on last generation and refurbished products, and 3) provides schools follow up sales and tech support. Amazon and Google certainly aren’t currently set up to do that. Moreover, it is clear the iPad itself costs significantly less than full sized desktop computers cost, and they are certainly more durable then cheap PCs.

At least admit you have no idea how much schools are paying for bulk purchases and what the purchases cover. If you do, you certainly aren’t sharing that information with us.

aardman

Another angle on iPad mini pricing. (i.e. it was set too high, esp for education)

There’s a certain fast growing market in the far east where the consumers are the most brand-consious in the world.  There, people think in terms of “if I’m going to spend a chunk of money on a tablet, I might as well save for a couple more months and get the iPad.”  You can replace tablet-ipad with car-bmw, smartphone-iPhone, etc.  This is a common sentiment in 3rd world countries, btw.

Could it be that Apple did the arithmetic and based on their forecast growth for the China market, they figured they were better off protecting Apple’s aspirational brand rep?

mhikl

Maybe the wonder of Apple is its mastery of the Vulcan mind bend in the collective, possibly still in touch with Steve’s essence. The fruit company certainly has some kind of planning skill far, far beyond the veil.

There are reasons iPm is more expensive than expected; must be. It might be meant for neither the school nor the financially conscientious. Maybe doctors, other professionals, the retired wealthy with weak arms are the intended markets. What about restaurants? Light and big enough for those waif like waitresses to balance in one hand, the other free to carry coffee? It is definitely meant for those familiar with coin, not for school. Besides, part of Apple’s magic is that it is a little costlier than plastic and desperation.

Schools don’t need the latest bells and whistles for what second-iPad can do already. But smaller is not good for schools. There is a lot of white space in schools texts; that’s how parents can tell they are for little people. It seems obvious the iPad 2 is sort of what a perfect-fit-school-version already is. With time it will become thinner and lighter while continuing to use older parts from the bargain bin. And it’s no secret that schools aren’t into the upgrade race. For most uses the technology may already be in current iPads. Such would be an honourable excuse for old (much older than is usual for Apple) technology. I would not be surprised to see Apple forgo the retina display for these tykes until cost meets reasonable. Little people have good eyes. Make ‘em use them.

wab95

John:

The piece by Mourdoukoutas is notable for the assumptions he makes regarding extant markets, but is at least consistent with his theme that a variegated set of offerings, however mediocre, will eventually trump excellence in a single package. With respect to his assumptions, he cites markets of clients who want to use their tablet to make online purchase and read, or that want enterprise solutions and to use Office, etc. ‘Markets’? Really?

The last actual data I saw indicated poor KF use use post Christmas last year, such that I think we can dub the KF the Ghost of Christmas Past. Amazon wasn’t responding to an extant market, it was trying to create one, with only spotty success thus far, no hard evidence that they will yet succeed. They might, but this is not guaranteed.

What of MS? A market for those who want to use MS Office on their tablets? This assertion is also not evidence based because there are no data to support it; no tablet yet runs Office, many thanks to MS’s foot dragging on providing it. With all the millions of tablets now in service in enterprise, where is the evidence of the current Office market? Not to say that there would not be Office uptake were it available (I’d buy it, were it priced right; otherwise I’d continue with my current solutions), but to argue that there is a nascent ‘market’ of users not yet actualised who will only become tablet users when tablets Surface (bad pun) is generous at best. Where are his data?

This is not to say that Mr Mourdoukoutas’ predictions about market share won’t come true, or that Apple may indeed lose the tablet war; they most certainly could, particularly if they heed the conventional wisdom of the pundit class. Rather, I take issue with his line of reasoning, which flouts observed history of tech use. While throughout the history of computer use, we have integrated as much functionality into our computers as possible, making them generalised if not universal work tools, Mr Mourdoukoutas argues that we will do just the opposite in the post PC era, and that we want our tablets in particular to be task specific and market dedicated. I don’t want to use my iPad for as many of the tasks, both work and play, that I can import from my laptop? Is he kidding? Or is he arguing that there are people who only want to use a tablet if the have to do task X, and therefore the best tablet for them is from companyX? If that is his argument, then he denies the post PC era, as we will clearly need something, presumably those PCs, to continue our general task, for which our tablets offer no solutions.

This is not even 1990s thinking; it’s magical thinking - predictions made in the absence of either precedent or data.

John Martellaro

wab95: What happens when distinguished authors from other fields are invited to write about Apple is that they sometimes get little bits and pieces right, but miss the big picture. A picture that writers who cover Apple 12x5 have.

So the challenge of Particle Debris is sometimes to roll out the bits and pieces for all of us to ponder—even though we all do have the larger perspective.

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