iPad

iPad mini? Five reasons why it's a risky business for Apple

Is Apple really about to launch a smaller tablet? If it is, the iPad maker will have to overcome a number of hurdles to succeed.

More established devices such as Samsung's Galaxy Tab will offer a smaller tablet from Apple competition that the iPad never experienced. Photo: Samsung

We're just a few short weeks out from an eagerly awaited Apple product launch and some of us are already getting excited about another.

Apple has called another media event for 23 October. If you don't know what it's likely to be about, you've probably been abstaining from the internet for the past three months.

The iPhone 5 is still difficult to get hold of in some areas after a record-breaking launch weekend. But - if that is even possible - the announcement predicted by pretty much everyone in the technology industry of a smaller iPad is even more keenly anticipated.

Again, the doubling-down on secrets that Tim Cook promised has failed to materialise. Like the iPhone 5 before it, the iPad mini has been the worst-kept secret in tech for many months and viewed as common knowledge for the past few.

The Wall Street Journal was the first to report on the smaller tablet device back in February. Since then, every tech site and blogger has talked in increasingly assured terms about the new device.

Most are calling it the iPad mini, or possibly the iPad nano. It's also conceivable there is no product, as some have argued - but let's face it, they're fooling no one. For the sake of clarity, we'll refer to the phantom device as the iPad mini.

Apple's manufacturers in overdrive

Multiple reports claim Apple's manufacturers have gone into overdrive creating the devices ahead of the 23 October unveiling. The Wall Street Journal goes as far as to claim Apple has ordered 10 million units from suppliers as we head into the hugely lucrative holiday season. A new iPhone and a new iPad? It's going to be some holiday season in Cupertino.

However, the new product represents more of a challenge for Apple than meets the eye.

When the iPad arrived, the market consisted of it and some tumbleweed. Two iterations later and the market is still dominated by the iPad. There are also a host of other devices from other manufacturers, which are struggling to make inroads into Apple's lead.

The iPad mini faces a different challenge from its larger cousin, which lest we forget is not even three years old.

If it comes to pass, the iPad mini will represent Apple's most challenging and potentially risky product launch for some time.

Risk 1. Stiffer competition

First, the smaller screen tablet market is very different from the field the iPad entered in 2010. There are a number of interesting devices from leading manufacturers that are already laying claim to the space.

Samsung was the first major competitor to arrive with the seven-inch Galaxy Tab. Now there are a number of heavyweight competitors in the market - most notably Amazon and Google - both of whom have won plaudits for their devices. So unlike the larger iPad, Apple will face stiffer competition from the outset.

Risk 2. Price and Apple margins

Second is the matter of price. Apple enjoys high profit margins on all its products but price will be a key consideration for consumers.

The iPad 2 currently costs $399, or £329 in the UK. The new iPod Touch starts at $299 and £249, while the 8GB Nexus 7 is sold for $230 and £159 and the $174 ad-free Kindle Fire will shortly be available in the UK for £169.

Amazon admitted to the BBC recently that it made no money from Kindle hardware, instead driving revenue from its content ecosystem. Apple will want the best of both worlds and enter a market just for the sake of being in there, especially one that so far has not been commercially a runaway success compared with the iPad's.

My feeling is that Apple won't try and compete on price but will retain its margins and hope its brand and residual halo effect convince enough consumers to pay that little bit extra.

Risk 3. Cannibalising the iPad

There's the risk that Apple may end up cannibalising sales of other iOS devices with the iPad mini. But the Apple philosophy is that it's better to cannibalise your own product with another of your own. Jobs told his biographer: "If you don't cannibalise yourself, someone else will."

Risk 4. Inferior screen resolution

Fourth, we come to the screen. One school of thought believes the iPad mini will launch without a so-called Retina display, an Apple marketing term to designate the high-resolution screen that first appeared on the iPhone 4 and has since spread to other devices including the iPad, iPod Touch and 15-inch MacBook Pro.

A smaller 13-inch MacBook Pro with Retina Display is also widely expected for the 23 October event but a common theory is that the 7.85-inch iPad mini will have a resolution of 1,024x768 - half that of the current iPad. The thinking is that this will allow developers to scale existing apps for the smaller device.

Apple has made the Retina Display a key marketing tool for its products. There's no doubt that a smaller resolution display on a device with a screen size between others with a Retina Display will be perceived as step back for the company.

Risk 5. Damaging Apple's user experience

Finally, there's the user experience. Steve Jobs was less than complimentary about the seven-inch form factor, describing devices as being dead on arrival and complaining that users needed to sandpaper their fingers to scale down to the smaller form.

This pronouncement may have been Jobs being Jobs - after all, he flatly denied Apple was working on a tablet a number of times. However, combine the smaller screen real estate along with the possible lack of a Retina display and you have a number of criteria eating away at the overall quality of the user experience. Just scaling down apps for smaller screens may not be enough. iPhone apps mostly scale terribly to the iPad. Developers may have more work to do for the smaller iPad.

Despite the risks, it's difficult to bet against Apple at the moment and 10 million sales of iPads heading into the holiday season doesn't seem that outlandish.

However, we're in for an interesting quarter if and when the device is unveiled on 23 October. The tech community loves to criticise the top player and how Apple deals with each of the five risks above will be key.

Will the competition prove more challenging than in the existing market? Will it be too expensive compared with competitors? Will the smaller iPad gnaw away at sales of its big brother or the iPod touch? Will an inferior screen resolution put users off? Will it fall short of the standards Apple sets for its products' user experience?

The iPad mini may well prove to be the trickiest balancing act of features and marketing that Apple has attempted in some time.

2 comments
Slayer_
Slayer_

Even if they already own an iPad and an iPhone. As long as Apple hypes it properly, it will sell.

DWFields
DWFields

While I'm not going to argue that something is in the works, calling it an "iPad Mini" may be going too far. Instead, this could be a purpose-built device intended as a new type of 'universal remote control' with iPod Touch-level operations otherwise rather than an iPad-esque capability--more like a Galaxy Note without the phone but more capable due to "cracking that TV thing" Jobs talked about. Tying it to the existing AppleTV could let you view on your TV while browsing programming and setting up your next show would make sense for a smaller device that might still offer the same Wi-Fi capabilities and functions as the Touch. If it went farther and somehow had software to recognize almost all existing TV products (TVs, DVD players, Blue-Ray players, etc.) and control those as well in a more intuitive manner, then Apple will have done what nobody else so far has managed--not even LogiTech.