Don’t believe me? Cast your mind back to 2004 when Apple launched the iPod mini. At the time, it was only slightly cheaper than the regular iPod and analysts shouted that Apple was making a crazy mistake.
When you put a product like the iPod mini into one of those feature grids that analysts and tech blogs love to publish, the conclusion was obvious; consumers would opt to spend a little bit more money to get a lot more storage.
But the mini went on to become Apple’s No.1 selling iPod. It turned out that consumers valued the form factor as more important than the storage. And those who valued storage higher just bought a regular iPod instead.
The iPad mini is from exactly the same playbook. This year’s iPad mini has a non-Retina 7.9in display; next year’s will have a Retina display. Think the price will stay at $369 forever?
If you think Apple is worried that the iPad mini will cannibalise sales of the larger iPad then you don’t know Apple very well.
In the most recent quarterly earnings statement, Apple CEO Tim Cook dismissed the notion that the Mini would cannibalise other iPad sales.
“The way that we look at this,” Cook said, “is that we provide a fantastic iPod touch, an iPad, and an iPad mini. Customers will decide which one, two, three or four they want, and they’ll buy those. We’ve learned over the years not to worry about cannibalisation of our products.”
He also offered some comments for those who enquired why Apple had entered the 7in tablet market when Steve Jobs had previously said that 7in tablets were “dead in the water”.
Cook said, “Let me be clear, we would not make one of the 7in tablets. We don’t think they’re good products, and we would never make one.
“One reason is size,” he continued. “The difference in just the real-estate size in 7.9in versus 7in is 35 percent. When you look at the usable area, it’s much greater than that: it’s from 50 to 67 percent.”
While the mini is more expensive than products like the Google Nexus N7 and the Kindle Fire HD, it has other advantages. One in particular is the breadth and depth of content available.
In terms of apps, Apple has a clear advantage with over 275,000 native iPad apps. Android has so few it doesn’t make the information available.
But beyond the App Store there’s access to other content like music and videos. For example, Apple sells music in 62 countries while Google only sells music in one country.
The numbers look a little better for videos, where Apple sells content in 62 countries and Google sells it in eight markets.
Turn to Amazon and the Kindle Fire and it looks even worse. For us Aussies, the only content you can legally buy from Amazon are eBooks. That’s right, no music, no videos and no TV shows.
So while at face value the iPad Mini is lumped in the 7in tablet category, the reality for many consumers goes something like this:
“I can spend $250 on a tablet with a small screen, no apps and no content or I can spend a little more on an iPad mini with access to a rich ecosystem of apps and content and trust that Apple will ensure the iPad is kept up-to-date with the latest software for the medium-term future.”
That’s a premium that we know millions of people will be prepared to pay.