iPad Mini rumors have been flying for a while now, and Apple is allegedly sending out invites today (October 10) for an announcement on October 17. 1 This is different than my normal predictions and prognostications because, frankly, all of this is very murky to me. I’m really just thinking aloud, and writing what I think.
I should also emphasize that I think I’m very wrong here. The most logical iPad Mini would just be a smaller iPad with an almost-Retina display, amazing battery life, Lighting connector, and full-fledged iOS 6. But that’s boring, and I don’t see what it really adds to Apple’s product line. This post is really about how I think Apple could design an iPad Mini so that it adds something new and game-changing to the market place, but my predictions probably aren’t realistic.
Summary (in case you don’t feel like reading the whole thing)
- I don’t really understand the niche that the iPad Mini would fill
- If Apple does release an iPad Mini, they should’ t call it “iPad” anything – they should call it iPage
- iPage should have a color e-Ink screen
- To keep costs down, iPage would have to be a feature-poor iPad
- iPage should run a lightweight version of iOS
- iPage should start at $199 for a 16GB version (maybe the only one)
- iPage should offer a $100 option for cellular connectivity
I don’t really understand the niche that the iPad Mini would fill
Will there be an iPad Mini announcement? It seems dubious to me, but the rumors are pretty loud and strong, so I have to give them a lot of weight. I don’t quite understand why Apple’s iPad needs a small cousin to compete with Kindle et al. The biggest problem with releasing an iPad Mini is the price point.
Price point – There’s been a lot written about this. The best piece I’ve seen is from Gizmodo: “The Single Biggest Question about the iPad Mini“. Basically, it’s tough to figure out where iPad Mini would fit into Apple’s pricing scheme. It would have to be cheaper than a “full-size” iPad (right?), which means it would land smack on top of the iPod Touch in Apple’s pricing structure. So, consumers could buy an iPod Touch or iPad Mini for the same price. That seems odd to me. I don’t think it’s a showstopper, but it would be strange to see an iPad Mini competing with iPod Touch.
I think the iPad Mini will have to start at $199 to compete with the “eReader” market that it belongs in. Presumably, the reason Apple would create this device is to compete with the Amazon and Barnes & Noble. To really compete in that world, $199 is almost mandatory. What’s odd is that Amazon and Apple have entirely different (opposite, really) business models. The Kindle is a loss-leader designed to give Amazon customers an easier way to buy stuff from Amazon 2. So, there’s the stuff people buy (songs, movies, etc) from Amazon, then there’s the way for them to buy it (Kindle Fire, e.g.). Apple does the opposite: their stuff exists to make the Apple ecosystem a richer place so that customers will buy their hardware, which is where they make all their money. So, in order for Apple to enter this space, they’d be creating profit-making hardware to compete with loss-leading hardware.
To be clear, I think Apple can do this 3, I just don’t understand why they would. Apple could probably create a great sub-$200 competitor for the eReaders out there, but I don’t see what they would gain from that device. Apple doesn’t want to sell music or eBooks just to sell them – they only sell those things to make iOS devices more useful. Trying to figure out the utility of a $200 Apple eReader keeps landing me in logic whirlpool.
I’ve been pretty good about iPad predictions in the past 4, and I’ve followed the iPad very closely, but I don’t quite understand why an iPad Mini makes sense. All that said, why not get into a hypothetical “iPad Mini is happening!” mindset and make some predictions?
If Apple does release an iPad Mini, they shouldn’t call it “iPad” anything – they should call it iPage
I’d expect Apple to differentiate the iPad Mini from the iPad itself. The iPad isn’t an eReader, it’s a tablet PC. But the “iPad Mini” wouldn’t really be a tablet PC so much as a super fancy eReader. My guess is they would differentiate it from the iPad by calling it something completely different. iPage seems logical, except it conflicts with their Pages word processor.
iPage should have a color e-Ink screen
I think the next big display breakthrough will be color e-Ink with refresh rates that make it possible to browse the web and flip through color e-magazines. There has been a lot of ambiguity about the resolution of the “iPad Mini” display (mostly that it won’t be Retina, but will still have pretty good resolution). This could be because the new display isn’t the same technology used for current backlit displays.
One thing Apple really focuses on is making it easy and pleasurable for its users to consume content on its devices. They’re in the midst of a full-on Retina update to everything they sell. It’s time for the next big thing, and that thing could very well be color e-Ink. Other firms have tried this 5, but the bottom line is that current technology just can’t refresh fast enough to be useful. It takes too long to draw the screen, so flipping pages or looking at anything that moves just doesn’t work very well. If Apple solves this problem and makes a 7″ color e-Ink screen technology (I would call it “Perfect Print” or “Print Perfect” or something like that) that allows for page flipping and animation, that would be a game changer.
iPage with Perfect Print would introduce some technical challenges for the user experience. Swiping and scrolling would probably have to be rethought so that they’re more efficient and economical. Unless they’ve made huge strides with refresh rates, we won’t be able to just swipe down and watch our Twitter feed inertially scroll by – e-Ink just couldn’t keep up with that.
To keep costs down, iPage would have to be a feature-poor iPad
My guess is that these Perfect Print displays would be expensive, which means Apple would have to cut some functionality elsewhere to compete at the $199 price point. What they would cut, I don’t know, but I have a few suggestions.
iPage should run a lightweight version of iOS
I don’t think this device would run a full version of iOS, but a slimmed-down version (think Apple TV). Mobile Safari might look more like the “Reader” functionality available now – no video, but a clean way to read and maybe see embedded (static) images. Email should be ok. Newsstand would obviously be a big part of the device.
iPage should start at $199 for a 16GB version (maybe the only one)
The baseline iPage would start at $199. Storage would start at 16GB, and that may be the only option. I think on-device storage would be a great place to cut costs since most of the stuff consumed on the iPage would be eBooks and that sort of thing–all stuff that could just be “streamed” from the cloud. It probably won’t have a camera, and LTE would be extra.
iPage should offer a $100 option for cellular connectivity
Getting all that stuff from the cloud is obviously easiest using WiFi, but Apple likes to give customers full mobility, so I expect a cellular option for $100. The pricing for this option is tricky, as the iPad cellular option is $130, but I just don’t see how they could offer a $130 add-on for a $199 device.
Final thoughts
I don’t understand the need for an iPad Mini, but if they do it, they should call it iPage, start innovating color e-Ink technology, and make it $200 or less.
If Apple could revolutionize e-Ink and make it really sharp, with great color saturation and faster refresh rates, I might just buy one. Otherwise, I’ll probably just stick to my iPad.
what about this? no storage, $99, required 3G/4G/WiFi connection. Simply a portal to your cloud content, face time, imessage, etc. Seems like everything apple does is a push to connect to the cloud, and this would be consistent with this and also to push people to upgrade their icloud storage quota (read: recurring revenue). Also, increases the number of people who would be buying data from service providers (again, recurring revenue, assuming apple gets a share of that). This is also consistent with the whole data sharing plans all the wirelss carriers are rolling out. You get like 5GB shared data and it’s $40 or something to add a smartphone, $15 for a tablet. Maybe they say like $10 to add ipad mini/ipage/whatever it is called.
curious to hear your thoughts…
Well, there has to be SOME storage, and 16GB is the smallest storage option they’re selling right now (except for iPod Nano). If they go with a regular, non-Retina display, then all those features you mentioned should work well, although it wouldn’t surprise me if the first generation doesn’t have any cameras (so no Facetime) to keep the cost down. I’m not sure, but I don’t think Apple gets any share of the wireless plans purchased to use Apple products.
The real issue is they have to get the price down so it makes sense to buy a Mini over a full-sized iPad. That means $199. With current component costs and stuff, it’s tough to get down to $199, even with a lower-res display. The iPod Touch starts at $299, and that’s basically a smaller version of what an iPad Mini would look like (assuming no color e-Ink, etc.).
It would be shocking if they sell it for $99, and I just don’t think it’s possible for them to do that and make money. Apple sells at a premium, and generally has really high margins on their hardware, and I don’t see any margin (or possibly negative margin) on an iPad Mini, even if it’s really, really stripped down.
Seems like there was no announcement for the rumored event today, so it’s possible all this iPad Mini stuff is just rumors. I guess we’ll see. If we get through October and there’s no announcement, I think it’ll be safe to say there’s no iPad Mini coming this year.
That would be the genius of it, if they had no storage. As in, you couldn’t store songs, video or photos on it. Everything you did would be an interface with the cloud. I’m no apple expert wrt pricing/hardware, it just seems like all of the newer apple products (incl software) are encouraging people put content on the cloud. I agree it would be a break from current apple strategy to offer a low-price option a la the kindle, that was just a means for people to purchase apple content, but maybe they are feeling the pressure of amazon and feel the need to put out a competing product.
They already have Apple TV, which basically does what you’re describing (it essentially has no on-device storage and pulls/streams everything from the cloud or other devices on the local WiFi network). But I don’t think that’s the way to go with a tablet. People will want to be able to store SOME stuff on the device because a big use-case is to take it on planes/trains/car trips where WiFi won’t be available and cellular could be spotty. They don’t need MUCH storage (16GB is plenty for eBooks), especially since 16GB flash memory chips are ridiculously cheap now.
Apple simply won’t cut very far into their margin on any hardware. That’s not their model. They sell premium hardware at high margins, and that’s where they make their money. All the software and media is just a feature to encourage people to buy their hardware.
I’d be really, really surprised if Apple was willing to go below 20% margin on the iPad Mini. The iPad is around 23% or so, which means they’d have to either charge a higher price (than $200) or cut some stuff from the Mini to get to $200. It’ll be interesting to see how they get there (or if they price it higher, but I don’t think that makes sense).
Josh, I had exactly the same thought. I’m holding quite a bit of AAPL (bought 08) and if this new device is simply incremental as the Iphone5 was, I’m out. Color eInk would hit amazon on the chin, plus it would make a ton of sense to get iBooks and schoolbooks off the ground. @200$ I would get 3 or 4 of them, maybe even 5 or 6, and I’d purchase my books on the platform instead of on the kindle. That would put a dent in the universe, especially if it ships with a copy of the Hitchhiker’s guide to the galaxy on it…
The thing is, I think the guys in charge now are about marketing and price points and not about great products. Deja Vu circa 1987.
Francois, I think color e-ink would be huge because it feels like that’s where display technology will eventually go. A backlit color e-ink display would be the best of both worlds, especially at super-high resolution. Apple has shown that they like to push the envelope when it comes to display technology. Whether it’s actually feasible to do a color e-ink tablet right now, I don’t know. But I don’t think people expected Retina when it hit, so there’s a chance.
I’m still holding AAPL, but not buying any more right now. I like what they’re doing, and my (very conservative) valuation still has some room for profit on the shares I owe right now. But I’m not quite as enthusiastic as I was back in 2009 and 2010, when I first started really following AAPL. All that said, I still think an Apple TV would be a boon to the business for a number of years to come, and the TV market is exactly the kind of market that Apple likes to upend. The TV market right now is VERY similar to the cell phone market in 2007. Hopefully they release a major new device soon. A color e-ink tablet could be that device, or an Apple TV. I’d be really happy to own AAPL (and maybe buy more) if either of those devices show up.