How Will Amazon, Barnes & Noble Survive the iPad Mini? 354
redletterdave writes "For about a year, Amazon.com and Barnes & Noble were almost completely alone in the 7-inch tablet market. It was nice while it lasted. The past few months have seen Google and Microsoft unveil their 7-inch tablet offerings — the Nexus 7 and Microsoft Surface, respectively — and it looks like Apple is about ready to get into the mini tablet game, too. If Apple releases its first 'iPad Mini' next month, what can Amazon and Barnes & Noble do to keep the Cupertino colossus at bay, as well as the other new competitors in the 7-inch tablet game?"
Re:Who cares? (Score:4, Interesting)
People care about what Apple is doing because Apple has historically set the trend for pretty much every market that they have entered
Bad analysis: no market (Score:3, Interesting)
There is no tablet market per se. There's an iPad market, an e-reader market, and a grab bag of every other manufacturer.
The Samsung Tab? Apparently it sold 37k units in the US last quarter, which makes it a total non-competitor to the iPad.
http://tech.fortune.cnn.com/2012/08/10/apple-sold-5-7-million-tablets-in-the-u-s-last-quarter-court-documents-show-samsung-sold-37000/ [cnn.com]
http://fortunebrainstormtech.files.wordpress.com/2012/08/screen-shot-2012-08-10-at-7-33-07-am.png [wordpress.com]
So anyway, what does it matter? There are Nook and Kindle readers on iOS - that revenue stream should be fine. By not selling the hardware both companies save money, but lose on lock-in. The impact will probably be marginal, or possibly a small plus as more people move to nook/kindle and away from books.
Of course, it depends on the price. If the iPad mini comes out at $199 it's game over for everyone else. I doubt that price point because Apple generally doesn't sell its hardware at a loss or close to a loss. They just need to make it close. $300 sounds more realistic - that's $100 less than the Ipad 2 and overlaps well with the iPad touch pricing.
Re:Who cares? (Score:4, Interesting)
"Who cares about a possible iPad Mini that isn't drinking the Kool-Aid already? Just another iOS device, they already come with a range of displays, connectivity, etc. If you have already bought into the iOS ecosystem you might want one, otherwise not so much"
And this is where a lot of people (no offence) fail to understand how Apple really operates. Apple will make it their job to ensure that you must have one, that you cannot live without one, that you are a social outcast without one.
They want people to say "Oh, look! A smaller iPad! I didn't want one before, but now that it's smaller, fits in my handbag, and is cute, I want one!"
What will they use it for? Nothing that they can't already do on a computer or a standard iPad, that's for sure. But the fact that it's yet another Apple Fashion Accessory[1], they will buy buy buy buy buy! Because if you don't have one, you're weird.
I don't have an iPhone or an iPod. I have an HTC Desire and a Sandisk Sansa (with Rockbox). What do people say to me?
"Why do you use that? Why don't you get an iPhone/iPod? Everyone else has one."
And when the iPad Mini comes out, it will be like no 7" tablet existed before it, and that Apple has reinvented the market again. Everything else will be a copy (like those copycat Asians at Samsung). We all know it to be true - this is what the general public will believe.
[1] - I don't believe there actually is a tablet market. Just an iPad market. No one wants tablets, just something that makes them look cool and hip. Like everyone else.
Re:Why should they care? (Score:5, Interesting)
If Kindle hardware sales dry up due to competition from other tables, it's not a problem as long as the other devices that people buy support the Kindle App.
The problem is that Apple has slowly been making it harder to make its devices sale channels (unless you're willing to pay the Apple tax). Not only they forced Amazon to remove in-app book purchasing, they even made them to remove the button that would take the user to Amazon's Kindle web store in the browser. Right now Kindle app on iOS is a plain reader only, and you have to know where to buy the books on your own.
On the other hand, there's iBooks, which is more prominently there (every iOS device bugs you to install iBooks as soon as you open the app store), and lets you browse the books and buy them, not just read them. I suspect Apple is diverting quite a few iOS users who'd otherwise go to Amazon that way.
Re:Who cares? (Score:4, Interesting)
I would only add that it's a new market with lots of margin for growth, therefore I do expect a lot of people to be interested, regardless of kool-aid drinking history. I'd expect the Windows tablet market share to grow a lot when they get MS Office to run on it, and I'm sure there's other players like Nintendo who will get a slice. Apple will probably remain the leader in the high end, Android the overall leader and who knows what follows.For me, the mini iPad is more meaningful if thought in terms of price rather than screen size. If they sell it for just above the Nexus or Kindle price, it will be yet another awesome success for them.
Re:Eink (Score:4, Interesting)
Might as well hold onto your books. I've been trying to sell mine and it's a waste of time. The used-book store offers a quarter a book (about 3% of the price i paid). Online sales are better but you have to factor in packaging costs and fuel. Sounds silly that packaging costs would matter but if it costs 20cents for packaging and 60cents in fuel then that 2$ book sale only made you 1.20$ (15% of original price). If you add up all the hours you'll spend managing them and shipping them one by one.. total waste.
My suggestion is to donate them someplace that really needs them. A school, a prison, or a deployed unit in Afghanistan.
Re:How will Apple survive the price drop in tablet (Score:4, Interesting)
There's a market for luxury items. The CEO of Rolex says "We are not in the watch business, we are in the luxury business. The volumes are small. Apple is too big a company to take that route. Apple may have to try coming out with lower-priced lines to compete.
You have a good point, and I used to think the same, but consider that Apple has been selling high-priced laptops for over a decade, despite the emergence of $350 laptops, they still manage to sell them for $2000+. Not only do they sell them, their marketshare is increasing. I don't claim to understand HOW they do this, but they do. And so far, they've managed to keep selling iPads for some reason, too.
Pricing will be a challenge for Apple (Score:5, Interesting)
Assuming they actually do release it (has anything official been announced yet?), Apple is going to have a hard time setting a good price for the iPad Mini.
The Nook Tablet, Kindle Fire, and Nexus 7 all start at $199. Therefore, Apple won't be able to price the iPad Mini much more than $250 unless they want to be seriously beat out on price by A-list competitors. It's one thing to be beaten on price by bottom-of-the-barrel crap like Archos, but until now, the iPad has been quite competitive on price with equivalently powerful systems from A-list vendors such as Samsung. No other 10-inch tablet provides equal performance to the iPad at a substantially cheaper price. In fact, no consumer tablet at any price can beat the iPad 3's display resolution. Apple's success comes not only from providing a slicker product, but also from the fact that they've pretty much abolished the "Apple tax" on portable hardware, and used their supply chain dominance to leverage prices way down.
At the same time, Apple can't sell the iPad Mini for much cheaper than the iPad 2 ($399), because if they do, it will cost them a substantial number of sales on the better hardware. A lot of tablet users would gladly drop from 10 inches to 7 inches to save $150, if the user experience is otherwise the same. Apple doesn't want to cannibalize its own profit margins on their high-end tablets.
I'm sure their marketers have crunched all the numbers. My prediction: if the iPad Mini does see production, it will start at $249 or $299 for the cheapest model. Just low enough to lure over a decent number of Nexus/Kindle/Nook users, just high enough to keep the iPad 2 competitive. Also, the screen resolution will be 1024x768.