Apple is planning to launch an assault against the burgeoning Android tablet market by releasing an ‘iPad Mini’ – at a loss-making price of around £150, according to new claims.
The bargain-basement priced tablet will even feature the same ‘Retina’ display featured on its big brother, bringing the same 3.1million pixels to a smaller 7-8″ display.
Sources told Apple fansite iMore that the aggressively-priced tablet will launch in October this year, with Apple potentially selling the sub-$250 tablet at a loss in order to leave no room for competition.
With Apple sitting on cash reserves of $100bn, the tech giant should at least be able to stomach such a move financially.
iMore reported: ‘Today’s claim says that Apple is going to step-up the pressure on Android tablet manufacturers with an iPad mini that will sell for a surprisingly low $200-250.
‘That’s a bit hard to accept in the light of the other major claim this rumor makes, that the iPad mini will keep the full-sized iPad’s 2048×1536 resolution.
‘If this is true, Apple might have to take a serious cut to its margins, if not sell the mini at a loss. Considering the kind of cash Apple has on hand, though, it might be willing to take the hit just to help kill-off competition from Android tablets.’
If the iPad sells for $250 in the States, that would translate to £150 in the UK, although whether Apple would respect currency rates is up for debate.
With the screen as a premium feature, it is likely sacrifices will be made in other parts of the tablet, such as reduced storage space of, for instance, 8GB for your apps, videos and music.
This will likely cause issues for users as that amount of space will be used up quickly, marking this out as very much a budget tablet.
However, it will also appeal to people who want an iPad for casual browsing and occasional use of apps and movies, but who are not willing to shell out £400 for the bigger brother.
iMore and another website, Daring Fireball, have separately heard that Apple has already built the seven-inch device, and the only decision left is whether to ‘go to market’.
Both iMore and Daring Fireball have proven to be reliable sources of internal Apple discussions in the past.
Steve Jobs hated the thought of a smaller iPad, calling them ‘dead on arrival’. He said people did not wish to use smaller tablets for video-playback, and feared a smaller tablet would serve as a bridge between the iPad and the iPhone, resulting in app-makers simply ‘stretching’ their phone apps for the tablet.
In a 2010 earnings call, he said: ‘One naturally thinks that a seven-inch screen would offer 70 percent of the benefits of a ten-inch screen.
‘Unfortunately, this is far from the truth. … The reason we won’t make a seven-inch tablet isn’t because we don’t want to hit a lower price point, it’s because we think the screen is too small to express the software.’
Another big problem – which Android is struggling to deal with – would be the resulting fragmentation, with app-makers having to invest more money for coding different versions of their apps for different devices, something Apple has almost entirely succeeded at avoiding so far.
With the Android tablet market maturing, and competitors like Amazon launching their own tablets such as the Kindle Fire at less than $200, it would make sense for Apple to join the burgeoning cheaper market, although the company may be concerned about devaluing their premium brand, which is associated with high prices but also high quality.
However the company has previous form with cheaper models. The iPod music player was released in 2001, and in 2004 and 2005 the iPod Minis and Nanos were released, bringing elements of Apple’s flagship device to a cheaper market.
In March, a source from within competitor Samsung made a ‘mini’ indescretion while talking to the Korea Times.
While discussing Apple and Samsung’s $9.7billion deal for Samsung to manufacturer parts of the iPad, an official said: ‘The contract is expected to rise to $11billion by the end of this year as Apple is planning to release a smaller iPad, probably with a 7.85-inch screen, and to sell more of its MacBook Air PCs using Samsung’s faster solid state drive storage.’