Tablet makers have found it impossible to compete with Apple’s iPad in the $400-and-up segment of the market, and now Apple’s smaller iPad, expected to be priced below $300, should only make life tougher for their competition.
Analyst Shaw Wu with Sterne Agee said he believes Apple’s so-called “iPad mini” will prove to be “the competition’s worst nightmare.” He noted that competitors are already struggling to compete against the $399 iPad 2 and $499 iPad, and Apple hitting an even lower price point will only expand its share of the tablet market.
Wu says the main question is whether or not Apple will “go for the kill” against competitors and lower its margins enough to reach a $199 price point. This is where competitors such as the Google Nexus 7 and the Amazon Kindle Fire have found some success.
Wu doesn’t feel Apple needs to drop to that price point however, and thinks Apple could set a price of around $350 for its new device, and still find success with it.
With a product already at the $199 price point, (the 8GB iPod touch), and the iPad 2 sitting at $399, Wu says an iPad mini price point of $299 or $349 makes the most sense for the company.
The iPad mini is expected to run at a resolution of 1,024-by-768, have front and rear-facing cameras, and the smaller Lightning connector introduced with the iPhone 5 and latest model iPods.
Apple will be holding a media event next Tuesday, where it is expected they will introduce a smaller iPad, as well as new Mac hardware.