Apple telling suppliers to prep for mass production of smaller iPad - WSJ - Page 4

Apple will release a smaller iPad, that's a certainty, but the company is too savvy to position it in the same space as the iPad. I don't think it'll just be a 'smaller iPad'. It'll have it's own identity and target market.

Remember the iPad wasn't announced as a tablet. It was announced as a netbook replacement, and did it's job perfectly by pretty much taking over that segment and destroying the netbook.

So I think a smaller iPad will probably be positioned in a different space, namely the e-reader market. Think about it, while current iPad's e-reader features are advertised, they're not really given priority.

Now imagine a smaller iPad that's ultra light, ultra thin, super durable, and that possesses one new KILLER FEATURE, which I think will be e-reader specific. Like a color touchscreen that's readable in daylight. All of a sudden you have an e-reader that can surpass the Kindle on every level (better readability, better build quality, huge app selection, iTunes music/movie library). It'll also be a more focused device than the Nexus 7, which is a good thing.

So I predict Apple will announce "The world's best e-reader with the world's largest app store" come this fall.

Quote:

Originally Posted by jragosta 


So?
Lots of apps are the same on the iPhone and iPad and they work just fine. Others are nearly the same with only minor tweaking by the developer.
The point is that the icons and other items on an iPhone are tiny - and lots of people run apps on iPhones, so there's no inherent reason why apps couldn't easily be run on a device 4 times the area.

Of course apps can be run on a 7.85" device,  both iPhone and iPad apps. As I pointed out in a different thread yesterday, there might be a few iPad apps that will seem cluttered on a smaller device than the original 9.7" that they were designed for. But it's totally doable, and those people with the smaller tablet, will just have to live with it.

Quote:

Originally Posted by jragosta 


The most recent numbers I've seen say that the Kindle Fire alone has more than 50% of the Android tablet market:
http://www.dailymobile.net/2012/04/28/does-size-matter-kindle-fire-captures-more-than-50-of-android-tablet-market/

That may be true, but 100% of the Android market is still not a lot.

Quote:

Originally Posted by dm3 

 

What apple tends to do is take an existing older product and lower its price. 

But remember that Apple dropped the numbering of the iPad models. The day the iPad (3) was released I had posted that this was a strong indicator that Apple didn't plan to set the roadmap for the iPad like they've been doing with the iPhone. That being to keep producing the older model as the "cheap" version. If there is no numbering of the iPad models, this would be very confusing to consumers. So it suggested that the cheaper version of the iPad was going to be something different, and therefore numbers weren't needed to differentiate between them. 

I suspect the continued sales of the iPad 2 was merely a stopgap until this smaller iPad was ready. Once it comes out the iPad 2 will be discontinued. Not only keeping the number of different models constant, but also opening up the iPad 2's price point for use by this new, smaller version. Otherwise there would be too much crowding at the low-end of the spectrum.

Quote:

Originally Posted by Tallest Skil 


 Apple also apparently has about 90% of the market that is actually being used. That tells me straight away what size people actually want.

Yes, because the one and only criteria for why people choose the tablet they buy is size. It has nothing to do with the operating system, the software and accessory ecosystem, all the apps and media they already have in iTunes because of the iPods and iPhones they've owned over the years.

</sarcasm>  :-)

This whole "there will never be a smaller iPad" argument reminds me of the "there will never be a Verizon iPhone" arguments people make not so long ago. And it's a lot of the same people who make both arguments (not saying you are one of them). For some reason some folks thinks Apple's current lineup is perfect and that they shouldn't continue to go after no markets their current lineup doesn't address. Not sure why anyone would ever think that was a good business strategy. Not that they should branch out in 100 different directions, but they can't sit still either.

Look what has happened with Galaxy phones...they're immensely popular.

Sooner or later, a 7" tablet is going to catch on...like, maybe a Nexus 7, and it'll be immensely popular. Apple would be foolish to not be looking at this. So far, 7" Android tablets have been underpowered, poorly designed or strangled by book-reading skins that make them undesirable.

I agree with one of the early posters that a 5" or 6" iPod might be preferable to a mini iPad. I really like my 5" Galaxy Player. Something like it with Apple's style would be cool.
 

Quote:

Originally Posted by jragosta 


Apple's initial target was 1% of the cell phone market.

Exactly, so they are more than covered with their current marketshare, no need to worry about competitors and their pieces of the pie. Precisely what TS suggested.

Quote:

Originally Posted by BuddyRevell 


You may be right. Hell, there may not be a forthcoming smaller iPad at all and they simply generated this rumor specifically to hinder the Nexus 7 launch.

Likewise it tells the world not to buy the iPad 3 because there is a bigger iPod touch coming.

Do you think Apple wants to spite its face by cutting off its nose.

Apple have more vested interest to keep making great products than us gossiping except those who own Apple share.

Quote:

Originally Posted by Tallest Skil 


So that's presently 15% of the actual market. Doesn't sound like something Apple would shoot for.
No one intelligent would have ever said that. A Verizon iPhone was inevitable. People saying there will never be a smaller iPad are like those of us who knew there would never be a smaller iPhone.
And Apple certainly proved us wrong, because as we all know, a 3.5" screen is far too big!

Quote:

Originally Posted by johndoe98 

 

Exactly, so they are more than covered with their current marketshare, no need to worry about competitors and their pieces of the pie. Precisely what TS suggested.

Quote:

Originally Posted by jragosta 


Probably, but they're quite happy with 5-7% of the cell phone market. What makes you so certain that 15% more of the tablet market wouldn't be of interest?

Once again the Apple doesn't care about Market Share meme rears it's ugly head. Apple fans tend to do this because

1) Its been the excuse for the Mac. Profits, not shares!

2) Some like the privileged ghetto. Keep the masses away. 

TS is an odd follower of a company like Apple. It's quite innovative, but its clear that TS does not like change. He doesn't get market share either. When I suggested that the 3GS would still sell after the 4S was announced he didn't get that any sales at all of the 3GS  would add to market share. You see; in the past they had this years model, and last years model, and thats all they are ever going to do. Ridiculous.

First things first. Apple would not be getting just 15% of the overall tablet market. It's entry into the mini-Tablet market would actually expand that market. Given the price the minis will be most of the market in the future. And yes people will have both in certain circumstances. A tablet, a mini-tablet and a laptop would be cheaper than a laptop a few years ago.

most importantly. Number 2. Apple are interested in market share. We know this because they say it. At the release of the 4S Cook made a point of not showing Apple's percentage of the smartphone market but their percentage of the overall market - then 5%. He said the rest was to aim for. He could not have made it more clear.

Also Apple talk up their market stats all the time, percentage of the music player market, percentage of app revenue, iTunes percentage of downloads, iPad market share. At least they do it when they are in the lead. 

So no they are not happy with the iPad starting with 90% of the tablet market and continuing to fall while they keep margins high. They want to maintain dominance.

Quote:

Originally Posted by asdasd 

 

So no they are not happy with the iPad starting with 90% of the tablet market and continuing to fall while they keep margins high. They want to maintain dominance.

So which is it... do they want to keep margins high or do they want to maintain dominance (ie. market share)? You seem to infer both in these two statements.

Quote:

Originally Posted by island hermit 

 

So which is it... do they want to keep margins high or do they want to maintain dominance (ie. market share)? You seem to infer both in these two statements.

I would be implying, you would infer. I think they will sacrifice margins. 

Quote:

Originally Posted by asdasd 

 

So no they are not happy with the iPad starting with 90% of the tablet market and continuing to fall while they keep margins high. They want to maintain dominance.

Quote:

Originally Posted by asdasd 

 

I would be implying, you would infer. I think they will sacrifice margins. 

I don't think so. Yes they've been about market share on one side and margins on the other. But I don't think they've ever been about sacrificing margins to gain market share. Price points for older models go down because production costs go down. That increases market share while maintaining margins.

I don't see them introducing an iPad Mini for lower margins to continue dominating the tablet space. They'd only introduce it if the margins were still there. And a $200 iPad Mini would not meet their margins. Maybe at $350. But I don't think that price point would significantly deter Android 7" tablet sales for $200. I just don't think they care about how Android is doing.

Quote:

Originally Posted by asdasd 

 

I would be implying, you would infer. I think they will sacrifice margins. 

Really? They haven't so far... as your statement shows. In almost 30 years of Mac production they never wavered on margins. I don't see it.

Quote:

Originally Posted by jragosta 


Why can't they do both?
Look at the iPad 10". Apple's margins are very healthy due to their incredible supply chain. It's nearly impossible to find a decent tablet for significantly less. Yet Apple has an overwhelming market dominance.
Why can't that apply to the 7", as well? Now, I don't really expect that Apple is going to get to $199, but they could make good margins at $249 to $299 and I suspect that their market position would be great, even at that level of price premium.

I agree with you. Asdasd seemed to be saying two things at the same time and I was trying to get a clarification.

This actually makes sense, it fills the gap in terms of price and screen size...

$199  3.5"   iPod touch (iPad nano)

$349  7.85" iPad mini

$499  9.7"   iPad

Quote:

Originally Posted by gelp 

I think it will be more likely by called Ipod than Ipad. Maybe even Ipod G(ame) because that's what it essentially is. I perfect gaming console. Podcasting is out, gaming is in. And for those who don't want to game it still can do all other things the Ipad an.

iPoad

...iPwnd

Quote:

Originally Posted by asdasd 


I don't think any reasonable person would not understand the argument.
Apple rarely mentions margins except in conference calls where they have to. Even then they guide lower on margins then they actually achieve sometimes by as much as 10%. They never crow about margins. As a company I don't think they care. Others put up the stats showing Apple at 80% of profits. Not apple. Apple shows the 5% of total market share and say the rest is up for grabs.
2) as I said Apple have have different versions of their lower end devices, from the lowest with no margins to the highest with more memory or GPS chips all gaining margins per device. Overall margins remain healthy.
They do this with the iPod touch, an iPhone with a retina display without the phone radio chip and gps. Sells for buttons at the lower end but the too end earns the margins.
The iPod touch on its own cant compete with mini tablets because it isn't one.

Tim Cook's name is synonymous with fat margins in the computer industry.

Quote:

Originally Posted by asdasd 

They never crow about margins. As a company I don't think they care.

You have no idea how much they care.  Quarterly reports are the key indicator of the company's success in the marketplace and the stock price is where it is today because Apple has reported improved earnings with each successive quarter.  Earnings as in profits - which are the product of their margins.  Apple is not running a charity; it's a company driven by earnings and it doesn't have the luxury of giving away product.  No quicker way to a $300 share price than couple of quarters of declining profits.

Quote:

Originally Posted by Venerable 

 

You have no idea how much they care.  Quarterly reports are the key indicator of the company's success in the marketplace and the stock price is where it is today because Apple has reported improved earnings with each successive quarter.  Earnings as in profits - which are the product of their margins.  Apple is not running a charity; it's a company driven by earnings and it doesn't have the luxury of giving away product.  No quicker way to a $300 share price than couple of quarters of declining profits.

Actually, I do know how much they care. Apple's margins are among the best in the industry. That tells me everything i need to know about how much Apples cares about margins.

Of course, Apple sees Android about to grab the market share of tablets like they have with smartphones and they decided to copy.....