Apple’s (NASDAQ:AAPL) global rollout of the new iPad mini kicked off Friday in Asia and Australia, but the device, which is priced above rival gadgets from Amazon (NASDAQ:AMZN) and Barnes & Noble (NYSE:BKS), was met with less fanfare than is typical of Apple launches, which can be high-energy affairs drawing large crowds of customers who stand in line for hours.
Only about 50 people waited for the Apple store in Sydney, Australia, to open on Friday morning. In the past, the line at the store had stretched for several blocks when the company debuted new iPhones. Queues in Hong Kong were also relatively quiet, with many customers only waiting an hour or two to get the device.
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Those customers turning out on the mini’s first day in stores cited its size and weight as its most appealing features, making the device more suited to being used as an e-reader than the larger model. But though the mini is priced below the full-size iPad, it is still decidedly more expensive than other small tablets. A comparably-sized Kindle Fire starts at $199, as does the 7-inch Nook tablet.
The iPad mini is Apple’s first foray into the smaller-tablet segment, where competitors have had time to build a consumer base unchallenged by the iPad. The late Steve Jobs once said that Apple would never create a lower-end iPad, but as companies like Google (NASDAQ:GOOG) and Microsoft (NASDAQ:MSFT) began working on larger, more computer-like tablets to rival the iPad in both size and function, Apple could no longer afford to ignore a whole set of potential customers. Thus, the iPad mini was born.
But perhaps Apple didn’t go far enough. With a starting price of $329, it’s not much more affordable than competitors’ higher-end tablets. In fact, Amazon’s new 8.9-inch Kindle Fire HD starts at $299, while Barnes & Noble’s first real iPad challenger, the 9-inch Nook HD+, starts at $269.
The mini’s appeal is thus limited to consumers who specifically want an iOS device, but want something smaller and more lightweight than the 9.7-inch iPad. For consumers among whom price is an important factor when making a purchase, the iPad mini only wins out over the iPad and a few higher-end tablets, including Microsoft’s new 10-inch Surface, which went on sale in October.
Some investors fear the mini will lure buyers away from Apple’s $499 flagship iPad, while doing little to upset the low-end market, where Amazon’s Kindle Fire and Google’s Nexus 7 are sold at or near cost.
Piper Jaffray analyst Gene Munster predicts Apple will sell between 1 million and 1.5 million iPad minis in the first weekend, far short of the 3 million third-generation iPads sold last March in the first weekend.
“The reason we expect fewer iPad minis compared to the 3rd Gen is because of the lack of the wireless option and newness of the smaller form factor for consumers,” Munster said in a note to clients.
However, Munster added, “We believe that over time that will change.”
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