iPad mini is Windows 8 hardware makers' worst nightmare, analyst says

Posted:
in General Discussion edited January 2014
Apple's iPad mini is predicted to be the source of much strife for competing tablet makers during the upcoming holiday shopping season, and one analyst believes the 7.9-inch device will cut into sales of newly-released Windows 8 products.

As the mini begins its world tour launch, with sales already started in New Zealand, many have offered their thoughts on how the device will perform in the mid-size tablet market currently dominated by Android-based products. However, Sterne Agee analyst Shaw Wu said in a note to investors that the speculation "misses the point," explaining that the smaller iPad's real competition is against PCs and Windows.

"We continue to believe iPad mini is the competition's worst nightmare and will likely slow down adoption of competitor tablets," Wu wrote. "In particular, we believe this could end up being a very tough holiday season for Windows 8."

iPad mini Rendering


Since Apple debuted the mini at a special event at the end of October, pundits have been comparing the tablet against products like Google's Nexus 7 and Amazon's Kindle Fire HD, devices they believe to be its nearest competition. Contrasting these views, Wu sees Apple's smallest iPad as having a greater impact on PC vendors, as the unit's $329 price of entry undercuts many of the new and upcoming Windows 8 products.

As an example, the analyst pointed to Microsoft's own $599 Surface RT, which he said was "arguably overpriced."

Regarding the iPad mini's price point, which some predicted would be in the $249 to $299 range, Wu believes the concerns are "overdone," and likens the product's positioning to the iPod mini and iPod nano.

"This controversy reminds us of what happened with iPod mini and iPod nano," Wu wrote. "Both predecessors were criticized as being overpriced but went on to do much better than expected. The key reason being high quality at a reasonable price and we see something similar here."

Apple's iPad mini is set to go on sale in 20 countries on Nov. 2 at 8 a.m. local time, though brick-and-mortar Apple Stores and resellers may be the only place to purchase one, as preorders for all launch models sold out within hours of going live.
«134

Comments

  • Reply 1 of 64
    ktappektappe Posts: 823member


    No, their "worst nightmare" would have been if Apple had been able to price the low-end model at $199. Then competitors would be run right out of business. $329 leaves room for them in the market.

  • Reply 2 of 64
    clexmanclexman Posts: 208member
    Nice to compare the price of the 7.9" 16GB mini to the 32GB Surface that includes the keyboard cover.
  • Reply 3 of 64
    When the reviews of the Surface are out along with reviews of the iPad Mini, you can bet that the big names will make the comparisons. I'm eager to read what they say. The distribution of the reviews will be the key to the success or failure of the Surface. Sure the few Microsoft stores and retailers will push the expensive tablets, but once people hear about how well or poorly it works for the money, Microsoft will have the answer to the question "Will it sell?".
  • Reply 4 of 64
    paxmanpaxman Posts: 4,729member
    ktappe wrote: »
    No, their "worst nightmare" would have been if Apple had been able to price the low-end model at $199. Then competitors would be run right out of business. $329 leaves room for them in the market.
    Which is just fine. If Apples goal was to eliminate competitors they could, but thankfully it isn't.
  • Reply 5 of 64

    Quote:

    Originally Posted by ktappe View Post


    No, their "worst nightmare" would have been if Apple had been able to price the low-end model at $199. Then competitors would be run right out of business. $329 leaves room for them in the market.



     


    Exactly what Apple wants.  Apple wants a bunch of manufacturers squabbling over the crumbs at the low end of the market in a race to the bottom.  While they might be able to move a lot of worthless units, it won't be enough to fund the development of powerful next-generation systems and they won't attract the kind of customers who spend $100 or more a month on software, services and media - which is where Apple makes big money and expands its ecosystem.


     


    Remember the home computer wars of the early '80s, when Commodore, TI, Atari, Coleco and Tandy got sucked into a raging price war at the low end of the market.  They pretty much all outsold Apple, ended up not making any money and their el-cheapo userbase pirated software instead of buying it, so only the biggest seller (Commodore) had anything in the way of a platform.  Even then, Commodore was pretty much wiped out by the arrival of the clones, their profit margins were so low and their platform incapable of keeping up with IBM's.  Only Apple survived.


     


    This is gonna be the exact same deal.  You'll see Samsung, Amazon, a bunch of Chinese Android craplets and whatever Surface junk Microsoft pumps out all competing with one another on price and spec sheets.  Margins will collapse, they'll be giving their cruddy tablets away, their cheapskate users won't buy any software or services and finally Apple will release some disruptive device - again - that makes them all obsolete, anyhow.


     


    History doesn't repeat, but it does rhyme.

  • Reply 6 of 64
    If you a consumer can compare a mini to a full-size iPad -- which they will -- then why can't a consumer compare a mini to a Surface? Wake up folks. People don't want to spend $500 and up on tablets. They were spending about that on an iPad, and they don't even have to do that now.
  • Reply 7 of 64
    mstonemstone Posts: 11,510member

    Quote:

    Originally Posted by clexman View Post



    Nice to compare the price of the 7.9" 16GB mini to the 32GB Surface that includes the keyboard cover.


    Right. They are not comparable at all. The target market for the Surface is tech nerds. On the other hand, the Apple faithful, multiple Apple device households, the well heeled, affluent, educated, discerning, quality conscious consumer is what makes up Apple's mindshare. No comparison whatsoever.

  • Reply 8 of 64

    Quote:

    Originally Posted by johnswilson1 View Post



    If you a consumer can compare a mini to a full-size iPad -- which they will -- then why can't a consumer compare a mini to a Surface? Wake up folks. People don't want to spend $500 and up on tablets. They were spending about that on an iPad, and they don't even have to do that now.


    But didn't you listen to Ballmer, the Surface is a PC!!!!!!! lol

  • Reply 9 of 64

    Quote:

    Originally Posted by clexman View Post



    Nice to compare the price of the 7.9" 16GB mini to the 32GB Surface that includes the keyboard cover.


     


    Let's not forget how much of that 32GB is eaten up by the OS.  Only 20GB available.  it's still more space, but not double.

  • Reply 10 of 64


    Holy Cow sunspot42 ... you actually know what you are talking about.  Of course you are spot on.  And you must be as old as I am and involved in the business to remember all of the names.  But I digress ...


     


    Yes I agree it is a race to the bottom for most of the cheap plastic vendors.  I actually have some respect for what Microsoft is attempting.  It is different and it is priced reasonably relative to their costs of manufacture.  It won't work for them but ...


     


    Andorid makes zero profit for Google.  Amazon sells its Fire for less than the cost to build it.  Who in their right mind would invest in these loser companies? Not me.

  • Reply 11 of 64

    Quote:

    Originally Posted by johnswilson1 View Post



    If you a consumer can compare a mini to a full-size iPad -- which they will -- then why can't a consumer compare a mini to a Surface? Wake up folks. People don't want to spend $500 and up on tablets. They were spending about that on an iPad, and they don't even have to do that now.


     


    I think that's entirely dependent on what you want to do on it.  Some functions naturally lend themselves to a larger screen size, much like on a laptop.


     


    The mini MAY (like the iPod Mini) end up becoming the more popular product by volume, but I think there will still be a segment that wants a 10" iPad, and are willing to pay for it.  As long as they buy an iPad, I'm not sure how much Apple cares which one it is.

  • Reply 12 of 64
    apple ][apple ][ Posts: 9,233member

    Quote:

    Originally Posted by ktappe View Post


    No, their "worst nightmare" would have been if Apple had been able to price the low-end model at $199. Then competitors would be run right out of business. $329 leaves room for them in the market.



    Apple doesn't need to wade around in the mud with the bottom feeders. Apple is at the top of the food chain and everybody else is below, far below, it's like a bottomless pit, and there's no limit as to how low they will sink.


     


    I wouldn't be surprised if Amazon or Google eventually offers some tablet for $10.00. I'm sure that they'll eventually make it all up in volume or something.


     


    I question the motives of people who wish for Apple to offer low priced junk.

  • Reply 13 of 64


    Holy Cow sunspot42 ... you actually know what you are talking about.  Of course you are spot on.  And you must be as old as I am and involved in the business to remember all of the names.  But I digress ...


     


    Yes I agree it is a race to the bottom for most of the cheap plastic vendors.  I actually have some respect for what Microsoft is attempting.  It is different and it is priced reasonably relative to their costs of manufacture.  It won't work for them but ...


     


    Andorid makes zero profit for Google.  Amazon sells its Fire for less than the cost to build it.  Who in their right mind would invest in these loser companies? Not me.

  • Reply 14 of 64
    I'm an MSDN member as well as an iOS and OS X developer... I simply cannot understand what the hell Balmer is thinking with Win8. You're spot on sunspot42... No pun intended. Microsoft server/enterprise products are still the bees knees, but they are seriously misunderstanding the tablet market... and it might be at the expense of their desktop dominance.
  • Reply 15 of 64
    wizard69wizard69 Posts: 13,377member
    People complain about the Mini and who would use it but it really doesn't matter, what Apple did a little over a week ago is very agressive Business. Simply put they have outclassed the competition at every size level. The price isn't outrageous on the Mini at all, those complaining really don't have a clue. Now all Apple needs is supply that meets demand.
  • Reply 16 of 64

    Quote:

    Originally Posted by sunspot42 View Post


     


    Exactly what Apple wants.  Apple wants a bunch of manufacturers squabbling over the crumbs at the low end of the market in a race to the bottom.  While they might be able to move a lot of worthless units, it won't be enough to fund the development of powerful next-generation systems and they won't attract the kind of customers who spend $100 or more a month on software, services and media - which is where Apple makes big money and expands its ecosystem.


     


    Remember the home computer wars of the early '80s, when Commodore, TI, Atari, Coleco and Tandy got sucked into a raging price war at the low end of the market.  They pretty much all outsold Apple, ended up not making any money and their el-cheapo userbase pirated software instead of buying it, so only the biggest seller (Commodore) had anything in the way of a platform.  Even then, Commodore was pretty much wiped out by the arrival of the clones, their profit margins were so low and their platform incapable of keeping up with IBM's.  Only Apple survived.


     


    This is gonna be the exact same deal.  You'll see Samsung, Amazon, a bunch of Chinese Android craplets and whatever Surface junk Microsoft pumps out all competing with one another on price and spec sheets.  Margins will collapse, they'll be giving their cruddy tablets away, their cheapskate users won't buy any software or services and finally Apple will release some disruptive device - again - that makes them all obsolete, anyhow.


     


    History doesn't repeat, but it does rhyme.



     


    There was another factor at work in the early home computer wars, and that was the education market. Apple was successful there and it gave Apple a profitable and wide base. This time around Apple is also successful in the educational market in even a bigger way. 


     


    There will always be bottom feeders in any market. We usually hear about the $199 tablets but the price point really goes all the way down to $69.95. So, there really is no bottom to how low one can pay for a tablet when specs and utility and software availability are not factors. 


     


    At $329 apple leaves very little oxygen for those priced lower while, at the same time, avoids being accused of unfair pricing practices.

  • Reply 17 of 64
    quadra 610quadra 610 Posts: 6,757member


    Apple in ANY space, is the competition's "worst nightmare."

  • Reply 18 of 64


    Being a Geek does not exclude you from being a well heeled, affluent, educated, discerning, quality conscious consumer. Just that we have the ability to see when a tech corporation has a good solid product like say a Unix Platform with a nice usable GUI or is trying to shove shit down our throats like permanently locking our media and documents into their eco system.

  • Reply 19 of 64


    Being a Geek does not exclude you from being a well heeled, affluent, educated, discerning, quality conscious consumer. Just that we have the ability to see when a tech corporation has a good solid product like say a Unix Platform with a nice usable GUI or is trying to shove shit down our throats like permanently locking our media and documents into their eco system.

  • Reply 20 of 64

    Quote:

    Originally Posted by Tychicum View Post


    Holy Cow sunspot42 ... you actually know what you are talking about.  Of course you are spot on.  And you must be as old as I am and involved in the business to remember all of the names.  But I digress ...


     


    Yes I agree it is a race to the bottom for most of the cheap plastic vendors.  I actually have some respect for what Microsoft is attempting.  It is different and it is priced reasonably relative to their costs of manufacture.  It won't work for them but ...


     


    Andorid makes zero profit for Google.  Amazon sells its Fire for less than the cost to build it.  Who in their right mind would invest in these loser companies? Not me.



     


    Google was seeing a small profit from the Google search on Android phones. They made a lot more profit from Google search on iOS phones and tablets. The sudden loss of 80 million iPads and even more iPhones from Google maps will be quite a loss. Then, if Apple develops their own search tied to Siri, Google will feel a huge loss of search revenue. After all, users who search and buy from the iOS platform out-weigh all the other search-spending by Windows and Android combined. How could Google attract advertisers money without Apple iOS/OSX search-spenders being in their equation? Android will be the most expensive back-stabbing business decision they could have ever made. 

Sign In or Register to comment.