Apple Still Not Threatened Enough by Kindle Fire to Invest in iPad Mini
The latest in an unending series of rumors about Apple’s supposedly devious plans to take everybody else out of the tablet market no matter the cost has recently popped up via iMore. Apparently the Kindle Fire is doing far too well and it will be necessary for Apple to step in and eliminate the competition before the holiday sales numbers have a chance to solidify into a real presence in the tablet market. This report indicates that the new iPad Mini will be available in October of 2012 if all goes well, along with yet another iteration of the iPhone.
Naturally, the speculation makes a number of rather impressive claims. The iPad Mini will sport a 7.85” Retina Display, for example. It will also be priced between $200 and $250. Basically it is a scaled down version of the iPad 3 that just happens to be half the price of the cheapest version of that tablet. The price drop can apparently be accounted for at least in part by the reduction of on-board storage space to 8GB.
Once again, despite how seriously this rumor is being taken at the moment by various sources, there is a major flaw in it. None of the details make sense.
The most obvious point is the pricing. In previous iPad offerings, Apple has never once accepted less than a 50% profit margin on every sale. The newest version, the iPad 3, is estimated to cost about $310 to manufacture (16GB, 4G Model). This makes it the least profitable iPad for Apple so far at an estimated 51%. Even if we assume there to be a relatively large decrease in production costs as they move from a 10” display to a 7”, there is no real way that the company could hope to get even a 25% margin out of a $200 iPad Mini. The Kindle Fire is only viable at that price because of Amazon’s heavy emphasis on media sales after the purchase.
There is also the issue of OS fragmentation. Regardless of whether the proposed device would be able to maintain the iPad’s 2048 x 1536 resolution, the decreased size would change the way that users interact with their device and therefore the way designers create their interfaces. It would introduce a new tier of apps that would have to be directly targeting the Mini. Coming into what will likely be a major competition with Microsoft’s Windows 8, Apple will not want to be dealing with a complete refresh of their store this fall.
There are plenty of other reasons that we can expect no iPad Mini. It would cannibalize iPod Touch sales. It would indicate that Apple was far more concerned about the Kindle Fire than the numbers come close to justifying. The list goes on. Basically, the chances of such a product hitting shelves is slim at best. Even if it happens, the final specs are certain to look nothing like what sites like iMore indicate unless the price is totally different from what they are expecting. The Kindle Fire will continue to be the dominant $200 tablet for a while longer and Apple will continue to be disinterested.