How Low Will Apple’s iPad Mini Go?
Apple (NASDAQ:AAPL) is just hours away from unveiling its much-awaited new product and the world is fairly certain it is an iPad Mini they’re going to see. While the features of the smaller tablet will be looked at and analyzed carefully, one aspect that everyone is looking forward to most is its price point.
It is no secret that Apple’s one big reason to enter the smaller tablet segment would be to undermine any impact the arrival of Google’s (NASDAQ:GOOG) Nexus 7 and Amazon’s (NASDAQ:AMZN) Kindle Fire HD may have had on larger iPad sales. But how far can Apple go to take on its rivals? Both those devices, sporting seven-inch screens, sell starting at $199. While matching that may be impossible to do, considering independent analysts have estimated it would cost approximately $200 to manufacture one unit of the device, Apple may be willing to some concede some inches when it comes to margins.
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Most analyst guesses have ranged from a starting point of $249 to $349. Sterne Agee analyst Shaw Wu predicts the tablet will cost between $299 and $349, a price that he thinks would still make the Mini “very competitive” in front of rivals.
“We see this as Apple playing both defense and offense,” Wu told CNNMoney. “They’re defending against 7-inch tablets from its competitors, plus going after even more potential PC buyers who instead opt for tablets.”
According to JPMorgan, the price range is likely to start at $249, because Apple can afford sacrificing margins in return for its “overarching focus” to take a bigger share of the tablet market. The iPad Mini will be attractive to the “more price-sensitive users and the e-reader crowd,” the analysts wrote in a research note on Monday, and eventually force Amazon and Google to make their own price adjustments.
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