Surge in iPad mini Popularity Shows Tablet Market is in Flux

At one time, all we had was the 9.7-inch iPad, and many observers thought that was the perfect tablet size. Time, technology and market forces have shown that the tablet market is actually in some flux. Where the tablet makers go from here includes scattering the market with size options and some shrewd guesses. Even then, no one knows how tablets will settle out.

I noticed an NPD report today that says smaller tablets are starting to take over the market. Demand for the 9.7-inch iPad were way down in January and demand for the 7.9-inch iPad mini as well as other 7-inch tablets were up considerably.

NPD attributed this to "... more attractive prices and the ability to hold the device in one hand rather than two." I think there may be another element involved as well. Customers are finding that there is a core suite of apps that are essential on an iPad. While there are 300,000 native iPad apps available, eventually people figure out that what they really need, over and above Apple's default suite, are just a select few. For example, a weather app, a calculator, a good clock/alarm, Netflix, the Kindle app, iBooks, a news app, a maps app, a document reader and perhaps a Twitter client.

iPad mini

If those essential apps work just as well on a 7.9-inch display as a 9.7-inch display, then the handwriting is on the wall for the larger size. (Except for the few percent of content creators .)

Evolution of the Species

Also, the market is evolving. When Apple first launched the iPad in 2010, its size, weight, battery life and economics were optimum. A 9.7-inch tablet was the only size people could buy, so they bought that size.

As time, technology and display technology have evolved, it has been discovered by customers that a slightly smaller, lighter less expensive iPad mini can do the job most the time. Even Tim Cook showed up at the Shareholder meeting sporting an iPad mini. I've seen many people on Twitter express a fondness for the iPad mini in preference to the much heavier iPad, often in a one pound case of its own.

Product Line Holes

Amazon can be credited with discovering the market segment for a 7-inch tablet. Back at Christmas 2011, they realized there was big hole in Apple's product line. Amazon set about exploiting that with the original Kindle Fire. Unfortunately, the state-of-the-art at the time didn't make for a very high quality device, especially with an immature version of Android: version 2.3.3 "Gingerbread."

It took some time for Apple to develop a first-class seven inch plus device, seeing the customer demand. Even as Apple did that, there were still observers who clung to Steve Jobs's original proclamation that Apple wouldn't build a 7-inch tablet. I know I took a lot of heat for insisting that Apple needed to meet the Amazon threat. Now, we know that what Mr. Jobs meant was that Apple couldn't build a high quality 7-inch tablet back then. And a little bit of FUD is always helpful to slow down the competition.

Surging Forward

But the competition wasn't slowed down very much, and so we saw the Google Nexus and the Amazon Kindle Fire HD in the fall of 2012, even before Apple could ship the iPad mini. Experimentation by those companies reflected natural market forces and customer preferences.

Apple may not be upset about the iPad mini cannibalizing the full size iPad, but what the company is probably more interested in is something else. We're at the dawn of the tablet era. Customers are still deciding what tablets they need and for what purposes.

Samsung is making some headway with the 5.5-inch Galaxy Note II. Smartphone screen sizes are inching up. Accordingly, what forces are emerging to drive device size? Is it driven by app evolution and technology? Wireless options? Display technology and costs? Which device sizes give Apple the best opportunities? Does this mean that the 20-inch table tablets being pushed by Microsoft's Windows 8 partners are dead, dead, and more dead? Does Apple have to meet every major screen size challenge or risk leaving money on the table and suffering Wall Street criticism?

One thing is certain. There is a lot of flux right now as the customers figure out what size displays they like at what tablet price points. If something unexpected comes (or doesn't come) from Apple soon, it will be because Apple has, once again, developed a keen understanding of those forces.