
Reflecting on the iPad mini event - alwillis
http://kensegall.com/2012/10/reflecting-on-the-ipad-mini-event/
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technoslut
While this article is interesting, the more interesting story is John Gruber's
soul searching on how he feels about the iPad mini – which is where I assume
you got the article from.

Three quotes from three stories on Daring Fireball:

>That’s a little more expensive than I expected — I thought they’d at least
hit the $299 mark with the entry-level Wi-Fi model.

>We shall see. But remember the iPod Mini, which debuted to similar reactions
in January 2004 — it was deemed too expensive compared to the better-spec’d
regular iPod that cost just $50 more.

>“Better but costs more” is a gamble. “Better and costs the same or less” is a
sure thing. And the iPad is hard to compare to any previous Apple product
other than the iPod. The iPod and iPad didn’t enter mature markets — they
entered nascent markets with no strong competitors and established themselves
as unquestioned market leaders. The iPad Mini’s $329 starting point leaves a
price umbrella in tablets that Apple never left for MP3 player competitors.

I think that Gruber disagrees with the price even though price margins has
always been their approach.

~~~
001sky
Seems apple is boxed in by the ipod touch @ $299.[1] Too bad. But they are
protecting their iPhone market. They won't go below that, because at some
stage it makes sense to use a throw-away phone and a data-only iOS device.

________

[1] 32GB model, no 16GB model in the iPhone5 form factor. At $199, you have to
down to 16GB and step back a generation in tech. They clearly don't want
people buying into the iphone5 form-factor at $199, no contract, etc.

~~~
technoslut
I don't think that Apple is protecting the iPod touch but they are definitely
are protecting iPhone margins. ThiPod touch is selling less year over year.

Apple's growth is starting to decrease. They're no longer getting 100% year
over year growth for iOS devices. Even Gruber assumed the 3GS would be
available in poorer countries but it hasn't.

Apple is going to have to eventually find growth beyond the iPhone and iPad
unless they're willing to lose subsidies for the iPhone or take less margins
for the iPad to increase growth.

~~~
alwillis
I don't see why Apple has to reduce the margins on the iPad or the iPhone when
they can't keep up with demand. They sold 5 million iPhone 5s the first
weekend and they could have sold a lot more if they could have made more.

The growth trajectory of the iPad is unprecedented--100 million in 2.5 years.

Apple is smart about not getting into the situation of having to reduce
margins on products--they use economies of scale to reduce costs.

~~~
technoslut
Growth, or lack thereof, affects stock value which also can affect future
talent employment and current employees. While the iPad may have future growth
ahead, many will not pay the unsubsidized price for the iPhone, which is where
most of Apple's current valuation lies.

Rumor has it that Apple is only getting ~25% margin on the iPad mini which is
unprecedented.

------
mladenkovacevic
The iPad Mini is different than anything Apple has done before. For the first
time Apple is not building a product to enchant brand new customers and
further grow their brand. Instead they are filling a hole that they feel was
threatening to pull their customers into other ecosystems. "Don't mind those
other, more affordable playgrounds. Pay attention to how we mill the shit out
of this block of aluminum just for you."

~~~
alwaysinshade
> "Don't mind those other, more affordable playgrounds. Pay attention to how
> we mill the shit out of this block of aluminum just for you."

Which is really how any fashionable product works. "Forget that Armani
Exchange produces its goods in the exact same country using the same cheap
labour as Kmart - we use nicer cuts of fabric and make nicer looking
products." Design and materials subjectively increase value, so I can only see
the mini selling like hotcakes.

~~~
mladenkovacevic
The distinction I was trying to make is that they are building this product to
satiate the needs of the already Apple-faithful, rather than trying to compete
in the small tablet market. It's them realizing that small tablets are popular
and saying "We have that too". The question is can they keep doing that with
every new form-factor that comes out (wearable, Raspebbry Pi-style,
embedded....)

