Spurred by the recently announced Amazon Kindle Fire and its $199 price, Apple is rumored to be exploring a new low-cost iPad for release in the first few months of 2012.
Analyst Brian White with Ticonderoga Securities has been touring China and Taiwan and meeting with component suppliers, where he has heard rumblings of a so-called “iPad mini” arriving next year. The “mini” name doesn’t necessarily refer to the size of the device, he said, but a lower entry-level price.
He said such a device is expected to arrive in the first few months of 2012, allowing Apple to tap into a “more price sensitive consumer segment,” and also fend off the Amazon Kindle Fire, the retailer’s first entrance into the touchscreen tablet market.
via AppleInsider
This sort of thing is so stupid I don’t even know where to start.
Or maybe I do. First and foremost, Apple doesn’t build new products because it’s “spurred” by someone else’s products. If there were a lower-cost iPad coming next year, it would have been in development for some time.
Knee-jerk reaction is what other companies do.
Second, rumors like this always assume that price is something that companies simply pluck out thin air, as if making things for less than you sell them weren’t important. Believe me, if Apple could make the current iPad cheaper without sacrificing quality, it would. But it can’t, so it won’t.
The Fire will sell quite well, I’m sure, but not because it’s any threat to the iPad.
Amazon can make cheap tablets until it’s blue in the face, because Amazon is fine with losing money on every tablet sold. They make it up on the content you buy. While Apple makes a small profit on the content, its main source of income has always been on the hardware itself. It can’t afford to lose money on cheap iPads in the hopes that you buy lots of iBooks and music. And it wouldn’t want to, because that would mean selling cheap crap, which is antithetical to everything Apple is.
So, maybe, maybe, we could see a small price drop on the entry level iPad next year. Maybe they’ll continue to sell the iPad 2 at a cheaper rate when they release the iPad 3, like they do with iPhones. But don’t expect a $199 iPad from Apple next year. It’s just not in the cards. And it doesn’t have to be, because Kindle Fire buyers aren’t going to take away any sales from potential iPad owners.
The only companies that will suffer from the Kindle Fire are all the other Android makers. (And suffer they will.)
