Apple’s introduction of the iPad Mini this week generated two lines of thinking about competition in the tablet space.
The first, articulated by some analysts, holds that lower-cost tablets have nothing to worry about. Reuters collected their comments in an article giving shape to their general lack of concern. The reason? The entry-level Mini’s $329 price, enough to give it distance from cheaper tablets on the market. A note from Nomura Equity Research indicated that “demand for Google’s Nexus 7 and Amazon’s Kindle Fire is unlikely to be much affected by the launch of the Mini given the significant price gap,” Reuters reported.
The second view says that the cost difference won’t topic up to a few analysts suppose. AllThingsD found several analysts who percentage that view. As J.P. Morgan analyst Mark Moskowitz informed the hole: “must Amazon and Google be involved? sure, they must be involved.” The argument here is that Apple very much extended its pool of doable patrons by way of making its access-level tablet $329, even as shrinking the pool of potential patrons for Android tablets through a corresponding amount. given that reasonable pills compete primarily on worth, the thinking is going, the inexpensive iPads get, the extra problem Apple’s competitors could have.
But there’s a third way of thinking about the situation, which has gotten less attention. It’s related to the first two lines of thought, and it goes something like this: Android-derived brands like the Kindle Fire and the Nook will thrive in an iPad Mini world — but devices based on a more pure version of Android will struggle.
Frank Gillett, an analyst at Forrester analysis, breaks it down like this. on the low- finish, the place instruments just like the nook easy contact sell for $99, instrument makers still have room to move. devices offered at that price are selling at price or at a loss to the manufacturer, with that producer hoping to sooner or later generate income promoting books, movies, track, games, and different services. With a gorgeous price, and healthy app and leisure offerings, low-end drugs are anticipated to eventually pose an actual challenge to Apple’s top class hardware. “we think that market will in fact grow to be the main challenger selection to the iPad,” Gillett told me.
Notably, such tablets will challenge the iPad in some ways while ceding superiority in others — graphics performance, app availability, and camera quality, for example. They pull in customers who want to read books, watch movies, play casual games, and surf the Web, while leaving the premium experience to more-expensive devices.
Then there are the capsules that purpose to challenge the iPad more immediately: the Nexus 7, for example, and the Samsung Galaxy Tab 7.0. each be offering top rate hardware centered at the comparable form of person who would possibly now choose to buy an iPad Mini. And it’s these tablets, Gillett argues, which may be in trouble.
“The iPad Mini, though it is priced high relative to the $200 Nexus — I don’t think (Google) ends up with much breathing room,” Gillett said. “They’re not distinctive. They don’t have the cool hardware. They don’t have the apps. What they have is low cost. And there will be people who will want that. But we just don’t think it enables the Android guys to get out of the niche they’re in now.”
In different words, somebody who buys a Kindle fire is aware of she’s getting a decrease-cost tablet that functions largely as a store — what the tech author John Siracusa once called “a magical, colorful window by which you’ll be able to provide money to Amazon.” however in an iPad Mini international, a consumer considering a midrange pill could have higher expectancies. And for now they may be expectancies that the Googles and Samsungs of the world can’t satisfy.
Android tablets will get their turn in the spotlight on Monday, when a range of new Nexus devices are expected to be unveiled in New York. My colleague Roger Cheng reports that we can expect to see updated Nexus 7 tablets, among other products. But there is little doubt that from the time it goes on sale, the iPad Mini will dominate the midrange tablet space. The Nexus 7 has sold about 3 million units since launch, according to Forrester; the third-generation iPad sold that in its first weekend. The iPad Mini appears poised for success.
“Apple is going to sell a lot of them,” Gillett said. “It will give the big iPad a run for its money as to which one gets sold more.”