Originally Posted by esummers
Apple could probably provide a lower end iPad that performs reasonably well sometime in the next year without usability sacrifices to add competition on the (previously nonexistent) low-end of the market.
I think it may be more interesting if Apple creates a scaled up version of the iPod Touch to compete with the fire. No iPad apps, but would work fine for iBooks, movies and games. The retina display resolution on the iPod touch gives them a lot of leeway to create a 7" device with a reasonable (non-retina) resolution. With all the rumors of a 7" iPad, I wonder if Apple may be experimenting with a larger iPod Touch. Downsizing the iPad doesn't make any sense because that would put a lot of extra burden on developers. Making the iPod touch larger would just work. I bet Apple could match (or at least be in the ballpark of) the price of the fire without subsidizing. I think it makes sense to have a big and small iPod touch and a retina and non-retina iPad. A big iPod touch would work well as a gateway device before getting a real iPad and it would also be appealing to families buying devices for children.
Of course if Apple didn't respond at all, the Fire could work to kill innovation in the Android market because developers would have no incentive to target the last two major releases of Android. However, this may just work in the short run. It would make sense that Amazon would refresh the Fire with newer hardware eventually and update the operating system to something newer. Regardless, Amazon may completely take over the Android market. That isn't necessarily good for Apple because it would provide a strong competitor instead of many weak competitors. It also isn't good for Google, but I don't see a clear way Google will come out ahead in the tablet market no matter what happens.
As I look at the success Apple is enjoying with iPad2, and with Steve Jobs ref to 7" is too small ... I am of the opinion Apple won't react to "FIRE" as too small, too cheap, no profit. They don't have to. I certain appreciate how most of the comment folks want more for less ... but in the real world, that is not Apple's approach. Apple is expanding into schools, and enterprise in a huge way. And Siri is just the tip of the iceberg... has search potential that is really scary for Google. Notice they just introduced e-textbooks. They have security features that enterprise absolutely needs and requires. Android is trouble in the malware department.
So Apple is coming out with a major upgrade again ... better resolution, faster processor and graphics, better for Medical, graphics and Mapping services. Notice how the office like functionality is showing up in Apps. Wireless connectivity and iCloud will be huge for enterprise for sync. Backup is still up for grabs as the phone carriers control these communication pathways, and all they want to do is take your money and slow down the date rates, because the networks get over whelmed quickly with large data volume transfer.
Put your business hats on people, not just your consumer low income wishes.