The launch of the iPad Mini was not a surprise to the world of gadgets and technology. Experts see this as Apple’s defensive move to ward off the competition among the smaller and inexpensive tablets introduced by Google and Amazon.
Apple is facing a strong challenge with the small iPad. The market is heading for the cheaper tablets and its two major contenders have introduced products that include a competitive price tag. Amazon’s Kindle Fire and Google’s Nexus 7 were both introduced at a lower price of $199. These companies are able to attain such price by maintaining the list of materials to a minimum and significantly adding a nominal margin to the device’s price. Instead, they depend on the greater shopper stickiness and contents sales in order to be lucrative.
Apple’s iPad Mini started at a price of $329, which is more than $100 from its competitors Nexus 7 or Kindle Fire, leaving them a room for competition. This scheme will lessen the impact of cannibalizing the sale of its predecessor, the 4thgeneration iPad. The price of the iPad mini is said to reflect the vision of the company to uphold its position as a first class brand in the point of view of the consumers, while at the same time avoiding important profit margin intensity on its iOs gadgets. The stock market valuation of Apple is in some way based on the high ASP or average selling price and greater margin for each device that it gets.
Introducing an inexpensive gadget that will match to its competitors may risk its sufficient device margin and critically affecting its valuation. In the end, it is the shoppers who will decide if a repackaged $329 worth of iPad 2 will represent ample value to rationalize their custom.
But here is a deal, Apple’s iPad mini is made to compete on its price in the following year. Meaning, Amazon and Google still has a year to enhance the experience on their tablets. If you notice it, when Apple introduces the new iDevice, they did not discontinue the older version. Instead, they continue the lowest storage gadget and drop its price at $100. Just imagine the 16 GB iPad mini at the price of $229, which is originally priced at $329. Then, it will suddenly become competitive on its price.
Reasons Why iPad Mini is Not Cheap?
There are actually 2 reasons why Apple introduced the iPad Mini at the price of $329. They are:
- They can provide to individuals who wish to have a first class device in a handheld size.
- Apple gave itself an allowance to drop its price on current models when new ones surface to cater to people who are looking for an inexpensive tablet.
The risk that Apple is engaging into is that Google and Amazon will not be able to effectively enhance their gadgets to better contend in a year. Although it is not a sure gamble, there is a greater chance that the assessment of Applet in the field of tablets is correct.
Sunny Popali is SEO Director at http://tempocreative.com. Tempo Creative is an Arizona Inbound Marketing firm that has served over 700 clients since 2001. Tempo’s team specializes in digital and internet marketing services including web design, SEO, social media and strategy.