I think some of the main reasons for a smaller, less expensive, iPad are being overlooked. The main one being: a less expensive iPad allows for a lot more people to purchase one. I don't think the people who want an ipad, but want it for cheaper, care too much about 64GB of ram, retina screen, or the 9.7 inch screen. If the people holding out are doing so because of price, an iPad at $299 or maybe even a little less, will win them over. I think it's the price, not the "I need to have a smaller iPad", that is driving Apple's decision to make such an item.
Have you not read recent articles from AI? Apple is moving everything to retina.
Apple is exploring a smaller device with a 7.85-inch display that would run at 1,024 by 768 pixels, a resolution identical to the first-generation iPad and iPad 2.
I have read recent articles, but it doesn't seem like anyone is certain about whether or not the "mini iPad" will be retina or not. I know plans are that the new lines of MacBook Pro, Air, and iMacs are planning to be retina. But don't want to jump the gun on the smaller iPad.
IPhone 4S BOM is around $180. The new iPad is around $220.
Quote:
Originally Posted by Tallest Skil
But we don't actually know that.
I know it's not going to happen, since it's so not Apples MO, but if they did sell a smaller iPad at $200, even if it was at a slight loss, they would piss on everyone else's bonfire, and almost certainly be able to recoup any losses with the halo effect of getting ever more people into their ecosystem.
I think some of the main reasons for a smaller, less expensive, iPad are being overlooked. The main one being: a less expensive iPad allows for a lot more people to purchase one. I don't think the people who want an ipad, but want it for cheaper, care too much about 64GB of ram, retina screen, or the 9.7 inch screen. If the people holding out are doing so because of price, an iPad at $299 or maybe even a little less, will win them over. I think it's the price, not the "I need to have a smaller iPad", that is driving Apple's decision to make such an item.
The problem is this is just not how Apple is run as a business. Now it is possible Tim Cook is changing things up, but there is no evidence. Apple's MO isn't to design a product for a given price point. It is to develop great devices and then sell them for what they can. The iPad 3 should be evidence enough there will not be a gimped iPad mini for 299$.
This is what Steve would probably say about a gimped iPad mini: "It's shxt!"
As I've noted in other threads an A4 iPod Touch is $199 retail from Apple today. The cost delta from the iPod Touch to a 7" iPod Touch is the cost of the display.
Given that the guts of the iPod touch are pretty old now I'd guess the margins are pretty good so the cost delta probably just brings the 7" iPod touch into line with Apple's normal margins.
I would hope to see a single core A5 vs an A4 but maybe not. I guess it depends on whether or not they can get that many from binning the A5s to make it feasible...
That's still just someone's guess. And I'm willing to bet almost anything that their manufacturing cost is far too low. It looks like they're only including direct labor without all the extra costs - quality, overhead, supervision, tech support, returns, etc.
I have read recent articles, but it doesn't seem like anyone is certain about whether or not the "mini iPad" will be retina or not. I know plans are that the new lines of MacBook Pro, Air, and iMacs are planning to be retina. But don't want to jump the gun on the smaller iPad.
I would say that it's extremely unlikely that they would make a 7-8" iPad with a retina display. Quite a few reasons:
1. I'm not sure the technology even exists to reduce retina display any further at the current iPad 3 resolution.
2. If they make up a new resolution, it's going to cause headaches for developers.
3. It's easier to bear the cost on a $500+ device than on a $300 device.
4. A 7-8" iPad with the older display resolution won't cannibalize iPad (10") sales as much as it would with a retina display.
That's still just someone's guess. And I'm willing to bet almost anything that their manufacturing cost is far too low. It looks like they're only including direct labor without all the extra costs - quality, overhead, supervision, tech support, returns, etc.
It's purely a labor cost (the number's been tossed around elsewhere). It doesn't include business overhead, shipping, etc. All these "Apple can still make a profit on a $299 7" iPad" posts are speaking out of their butts. No way; not going to happen.
The problem is this is just not how Apple is run as a business. Now it is possible Tim Cook is changing things up, but there is no evidence. Apple's MO isn't to design a product for a given price point. It is to develop great devices and then sell them for what they can. The iPad 3 should be evidence enough there will not be a gimped iPad mini for 299$.
This is what Steve would probably say about a gimped iPad mini: "It's shxt!"
I agree with you here about Apple and their MO. But with more and more rumors this device surfacing, I feel like maybe it is changing. Like you said, it could be Cook driving all this. I know Steve always felt the 9.7 was the perfect size; nothing smaller, nothing larger. As CEO's change, so do ideas and business models. Sad, but true. I guess only time will tell.
>>>>It's far more likely that Amazon will release a 10" Kindle Fire at $299, than Apple releasing a 7" iPad at $299.<<<
I disagree. Think about the iPod line of products. There are four iPod models, ranging in price from $49 to $399, with multiple price points in between. Why do you suppose that Apple introduced lower, and then even lower priced MP3 players? The Nano and Shuffle. To cannibalize their sales of higher end iPods? Of course not.
It does not take the genius of Steve Jobs or other Apple luminaries to understand that owning the higher end market does not mean that the lower end doesn't offer additional opportunities for new customers, profit and growth. Many people who couldn't afford or did not want to spend big bucks for an iPod, opted for a Shuffle or Nano. Think about all the buyers who bought a lowly Shuffle. Let me tell you the story of one iPod Shuffle buyer.
My son Paul, in his early 20s, with limited income, traded up from a portable CD player to an iPod Shuffle. Even the Shuffle was a stretch for his budget in those days. But several years later he chose an iPod Touch, at a pricey $299. That was followed by a MacBook Pro and an iPad and iPhone. You're getting the picture, right? That $59 Schuffle introduced Paul to Apple products, and Apple has been his choice ever since. Did the relatively modest profit on that Shuffle harm Apple's business? Or did it pay large dividends in the years to follow?
Now I'll tell you the story of my son Dave. In his early 30s my frugal son Dave bought an inexpensive MP3 player and thought it was a good player and a good value. I don't recall the brand but I'm certain it has been long dead. He also owned a Tracfone, the absolute low end in mobile phones. Later he bought a Dell laptop and desktop. And later he purchased a Blackberry. When I suggested that he didn't make the best decision on the phone, and showed him my recently acquired iPhone 3GS, he groaned and said he wished he had bought an iPhone too, because it was so much better. Six months later he switched to an iPhone 4. But he had missed out on other wonderful Apple products before hand.
You get the picture. Young adopters of quality brands stick with them. And you can be certain, if Apple introduces a smaller and lower priced iPad, many adopters will become long term or life time Apple customers.
Well, you may be thinking that Steve Jobs strongly derided 7 inch tablets about two years ago, right? Steve also said Apple was NOT interested in the mobile phone business, about a year before the iPhone was introduced. Look for a 7 inch iPad this year. It's a given, sooner more likely than later.
It's purely a labor cost (the number's been tossed around elsewhere). It doesn't include business overhead, shipping, etc. All these "Apple can still make a profit on a $299 7" iPad" posts are speaking out of their butts. No way; not going to happen.
I don't think it's that obvious.
iPad 2 is $399. All you need to do is take 25% out of the manufacturing cost of the iPad 2 and Apple would get to keep the same margins.
There are quite a few things that would help to reduce the manufacturing cost:
- 8 GB of Flash rather than 16 GB
- Screen is 35-50% smaller (depending on the size chosen) which probably amounts to a 20-25% reduction in cost
- Smaller battery
- Less material and machining in the case
- Slightly reduced shipping cost
- Simple improvement in cost from the learning curve
- Reduced component costs based on the standard decline in electronics costs
If they were willing to accept somewhat lower margins in order to gain share at the low end, they wouldn't need to reduce the cost even that much. And since I'm betting that the margins on the iPad 2 are pretty good, that's entirely possible.
JBHoule, couldn't one argue using the same reasoning that Apple should make netbooks?
Not at all. Apple looked at netbooks and didn't see a way to make a $300 netbook (to be competitive) that didn't stink. The 11" MacBook Air is Apple's answer to netbooks. If they come out with a low end one for $800, that would make it even clearer.
Why not just upgrade iPod Touch to 5"? Wait! The iPod Touch is selling over $200. How could Apple sell a 7" iPad for much lower than $300?
You're arguing over theoretical products as if they existed. The original article was neither reporting a fact or rumor, but merely what some analyst thinks if a rumored product existed. In other words, click-bait.
Not at all. Apple looked at netbooks and didn't see a way to make a $300 netbook (to be competitive) that didn't stink. The 11" MacBook Air is Apple's answer to netbooks. If they come out with a low end one for $800, that would make it even clearer.
I see. So Apple can't make a cheap laptop (netbook) that doesn't stink, but they can make a gimped iPad mini that doesn't stink.
I like this. What you want can be made, what you don't want, cannot be made...
iPad 2 is $399. All you need to do is take 25% out of the manufacturing cost of the iPad 2 and Apple would get to keep the same margins.
There are quite a few things that would help to reduce the manufacturing cost:
- 8 GB of Flash rather than 16 GB
- Screen is 35-50% smaller (depending on the size chosen) which probably amounts to a 20-25% reduction in cost
- Smaller battery
- Less material and machining in the case
- Slightly reduced shipping cost
- Simple improvement in cost from the learning curve
- Reduced component costs based on the standard decline in electronics costs
If they were willing to accept somewhat lower margins in order to gain share at the low end, they wouldn't need to reduce the cost even that much. And since I'm betting that the margins on the iPad 2 are pretty good, that's entirely possible.
Not at all. Apple looked at netbooks and didn't see a way to make a $300 netbook (to be competitive) that didn't stink. The 11" MacBook Air is Apple's answer to netbooks. If they come out with a low end one for $800, that would make it even clearer.
Let me run a mathematical concept by you. Assume a margin of 20% (for the sake of argument). 20% of $499 ends up being a bigger n umber than 20% of $299. If I, Joe Consumer, decide to buy a $299 device over a $499 device, Apple loses money in the grand scheme of things. They have to sell more of the cheaper device than they could have hoped to sell of the more expensive one.
The analysis is a joke designed solely to beat up the stock if it doesn't materialize.
Apple is still in the midst of building out their world wide footprint for the iPad and iPhone, with current designs; and keeping up supplies is already tasked to the max. They will make a boatload of sales and Education already buys them.
Let me run a mathematical concept by you. Assume a margin of 20% (for the sake of argument). 20% of $499 ends up being a bigger n umber than 20% of $299. If I, Joe Consumer, decide to buy a $299 device over a $499 device, Apple loses money in the grand scheme of things. They have to sell more of the cheaper device than they could have hoped to sell of the more expensive one.
Yes but you are assuming that the lower priced item will cannibalize the more expensive. Barring all the technical obstacles, a device in between the iPod and iPad would no doubt sell like hot cakes and shore up (and expand) that part of the market. I think an 'in-between' Pad would seriously cut into the iPod Touch market but less so the iPad market. And cannibalization would be offset by increased sales. Often times the regular iPad is too big and more often the iPod is definitely too small. I think the smaller form factor would appeal to younger people primarily. At least at launch. in terms of gaming such a device would be an obvious winner.
The greater portability compared to the iPad and higher usability compared to the iPod makes it better as a reader but is also sure to open up new markets. Education is an obvious one, in car navigation and entertainment is another. I am sure there are many other professional uses that would crop up.
I don't see what's so difficult to grasp here. The iPad in it's current form is great for a general device. It does get a bit heavy
for gaming or reading books IMO.
Even if you drop the price to $299 you haven't deal with making a lighter device that is easier to transport, game and read on. Some people are
price sensitive and some are going to be weight/size sensitive.
If you look at the new iPad. Everything is over-engineered. Retina display with two light bars, 40nm basedband/broadband chips. HUGE battery. Monsterous A5x chips.
Let's look at the rumor mill prior to TNI (The New IPad) launch.
If Sharp's IGZO technology didn't make the cut for a March 2012 launch it or other technology (In-Cell Touch?) could be repurposed for a fall launch in another product.
Display technology is huge. If IGZO or in-cell touch is cheaper to produce, thinner and power efficient it becomes a winner.
Next up is the A5x which is absolutely a monster of a chip. We now know that iPad2 may have a 32nm A5 processor that is much smaller (read cheaper if yields are good)
It's an ideal processor for the next iPod Touch and the mythical iPad mini.
I don't think the NAND storage is as expensive as people think. It's near $1 per Gigabyte and slated to drop as low a $.40 per Gbyte next year. Now isn't the time to get cheap especially when
Apple owns Anobit technology which should enable safer use of MLC NAND.
Last but not least Broadcom and ST Micro cover the Wifi/Bluetooth and Inertial sensors (shared with iPhone 6th gen) and you have the distinct possibility of a sub $300 iPad mini.
Comments
Quote:
Originally Posted by lloydster11
I think some of the main reasons for a smaller, less expensive, iPad are being overlooked. The main one being: a less expensive iPad allows for a lot more people to purchase one. I don't think the people who want an ipad, but want it for cheaper, care too much about 64GB of ram, retina screen, or the 9.7 inch screen. If the people holding out are doing so because of price, an iPad at $299 or maybe even a little less, will win them over. I think it's the price, not the "I need to have a smaller iPad", that is driving Apple's decision to make such an item.
Have you not read recent articles from AI? Apple is moving everything to retina.
Quote:
Originally Posted by tzeshan
IPhone 4S BOM is around $180. The new iPad is around $220.
But we don't actually know that.
Sorry, I misled you, it's $209:
http://www.amazon.com/ARCHOS-101-Internet-Tablet-8GB/dp/B00422W5QO/ref=sr_1_1?ie=UTF8&qid=1337120582&sr=8-1
Quote:
Apple is exploring a smaller device with a 7.85-inch display that would run at 1,024 by 768 pixels, a resolution identical to the first-generation iPad and iPad 2.
I have read recent articles, but it doesn't seem like anyone is certain about whether or not the "mini iPad" will be retina or not. I know plans are that the new lines of MacBook Pro, Air, and iMacs are planning to be retina. But don't want to jump the gun on the smaller iPad.
Quote:
Originally Posted by tzeshan
IPhone 4S BOM is around $180. The new iPad is around $220.
Quote:
Originally Posted by Tallest Skil
But we don't actually know that.
I know it's not going to happen, since it's so not Apples MO, but if they did sell a smaller iPad at $200, even if it was at a slight loss, they would piss on everyone else's bonfire, and almost certainly be able to recoup any losses with the halo effect of getting ever more people into their ecosystem.
Quote:
Originally Posted by tzeshan
IPhone 4S BOM is around $180. The new iPad is around $220.
http://eetimes.com/ContentEETimes/Images/Dylan/130316_ihs_ipad3.jpg
The problem is this is just not how Apple is run as a business. Now it is possible Tim Cook is changing things up, but there is no evidence. Apple's MO isn't to design a product for a given price point. It is to develop great devices and then sell them for what they can. The iPad 3 should be evidence enough there will not be a gimped iPad mini for 299$.
This is what Steve would probably say about a gimped iPad mini: "It's shxt!"
As I've noted in other threads an A4 iPod Touch is $199 retail from Apple today. The cost delta from the iPod Touch to a 7" iPod Touch is the cost of the display.
Given that the guts of the iPod touch are pretty old now I'd guess the margins are pretty good so the cost delta probably just brings the 7" iPod touch into line with Apple's normal margins.
I would hope to see a single core A5 vs an A4 but maybe not. I guess it depends on whether or not they can get that many from binning the A5s to make it feasible...
That's still just someone's guess. And I'm willing to bet almost anything that their manufacturing cost is far too low. It looks like they're only including direct labor without all the extra costs - quality, overhead, supervision, tech support, returns, etc.
I would say that it's extremely unlikely that they would make a 7-8" iPad with a retina display. Quite a few reasons:
1. I'm not sure the technology even exists to reduce retina display any further at the current iPad 3 resolution.
2. If they make up a new resolution, it's going to cause headaches for developers.
3. It's easier to bear the cost on a $500+ device than on a $300 device.
4. A 7-8" iPad with the older display resolution won't cannibalize iPad (10") sales as much as it would with a retina display.
Quote:
Originally Posted by jragosta
That's still just someone's guess. And I'm willing to bet almost anything that their manufacturing cost is far too low. It looks like they're only including direct labor without all the extra costs - quality, overhead, supervision, tech support, returns, etc.
It's purely a labor cost (the number's been tossed around elsewhere). It doesn't include business overhead, shipping, etc. All these "Apple can still make a profit on a $299 7" iPad" posts are speaking out of their butts. No way; not going to happen.
Quote:
Originally Posted by johndoe98
The problem is this is just not how Apple is run as a business. Now it is possible Tim Cook is changing things up, but there is no evidence. Apple's MO isn't to design a product for a given price point. It is to develop great devices and then sell them for what they can. The iPad 3 should be evidence enough there will not be a gimped iPad mini for 299$.
This is what Steve would probably say about a gimped iPad mini: "It's shxt!"
I agree with you here about Apple and their MO. But with more and more rumors this device surfacing, I feel like maybe it is changing. Like you said, it could be Cook driving all this. I know Steve always felt the 9.7 was the perfect size; nothing smaller, nothing larger. As CEO's change, so do ideas and business models. Sad, but true. I guess only time will tell.
>>>>It's far more likely that Amazon will release a 10" Kindle Fire at $299, than Apple releasing a 7" iPad at $299.<<<
I disagree. Think about the iPod line of products. There are four iPod models, ranging in price from $49 to $399, with multiple price points in between. Why do you suppose that Apple introduced lower, and then even lower priced MP3 players? The Nano and Shuffle. To cannibalize their sales of higher end iPods? Of course not.
It does not take the genius of Steve Jobs or other Apple luminaries to understand that owning the higher end market does not mean that the lower end doesn't offer additional opportunities for new customers, profit and growth. Many people who couldn't afford or did not want to spend big bucks for an iPod, opted for a Shuffle or Nano. Think about all the buyers who bought a lowly Shuffle. Let me tell you the story of one iPod Shuffle buyer.
My son Paul, in his early 20s, with limited income, traded up from a portable CD player to an iPod Shuffle. Even the Shuffle was a stretch for his budget in those days. But several years later he chose an iPod Touch, at a pricey $299. That was followed by a MacBook Pro and an iPad and iPhone. You're getting the picture, right? That $59 Schuffle introduced Paul to Apple products, and Apple has been his choice ever since. Did the relatively modest profit on that Shuffle harm Apple's business? Or did it pay large dividends in the years to follow?
Now I'll tell you the story of my son Dave. In his early 30s my frugal son Dave bought an inexpensive MP3 player and thought it was a good player and a good value. I don't recall the brand but I'm certain it has been long dead. He also owned a Tracfone, the absolute low end in mobile phones. Later he bought a Dell laptop and desktop. And later he purchased a Blackberry. When I suggested that he didn't make the best decision on the phone, and showed him my recently acquired iPhone 3GS, he groaned and said he wished he had bought an iPhone too, because it was so much better. Six months later he switched to an iPhone 4. But he had missed out on other wonderful Apple products before hand.
You get the picture. Young adopters of quality brands stick with them. And you can be certain, if Apple introduces a smaller and lower priced iPad, many adopters will become long term or life time Apple customers.
Well, you may be thinking that Steve Jobs strongly derided 7 inch tablets about two years ago, right? Steve also said Apple was NOT interested in the mobile phone business, about a year before the iPhone was introduced. Look for a 7 inch iPad this year. It's a given, sooner more likely than later.
I don't think it's that obvious.
iPad 2 is $399. All you need to do is take 25% out of the manufacturing cost of the iPad 2 and Apple would get to keep the same margins.
There are quite a few things that would help to reduce the manufacturing cost:
- 8 GB of Flash rather than 16 GB
- Screen is 35-50% smaller (depending on the size chosen) which probably amounts to a 20-25% reduction in cost
- Smaller battery
- Less material and machining in the case
- Slightly reduced shipping cost
- Simple improvement in cost from the learning curve
- Reduced component costs based on the standard decline in electronics costs
If they were willing to accept somewhat lower margins in order to gain share at the low end, they wouldn't need to reduce the cost even that much. And since I'm betting that the margins on the iPad 2 are pretty good, that's entirely possible.
Not at all. Apple looked at netbooks and didn't see a way to make a $300 netbook (to be competitive) that didn't stink. The 11" MacBook Air is Apple's answer to netbooks. If they come out with a low end one for $800, that would make it even clearer.
You're arguing over theoretical products as if they existed. The original article was neither reporting a fact or rumor, but merely what some analyst thinks if a rumored product existed. In other words, click-bait.
I see. So Apple can't make a cheap laptop (netbook) that doesn't stink, but they can make a gimped iPad mini that doesn't stink.
I like this. What you want can be made, what you don't want, cannot be made...
Quote:
Originally Posted by jragosta
I don't think it's that obvious.
iPad 2 is $399. All you need to do is take 25% out of the manufacturing cost of the iPad 2 and Apple would get to keep the same margins.
There are quite a few things that would help to reduce the manufacturing cost:
- 8 GB of Flash rather than 16 GB
- Screen is 35-50% smaller (depending on the size chosen) which probably amounts to a 20-25% reduction in cost
- Smaller battery
- Less material and machining in the case
- Slightly reduced shipping cost
- Simple improvement in cost from the learning curve
- Reduced component costs based on the standard decline in electronics costs
If they were willing to accept somewhat lower margins in order to gain share at the low end, they wouldn't need to reduce the cost even that much. And since I'm betting that the margins on the iPad 2 are pretty good, that's entirely possible.
Not at all. Apple looked at netbooks and didn't see a way to make a $300 netbook (to be competitive) that didn't stink. The 11" MacBook Air is Apple's answer to netbooks. If they come out with a low end one for $800, that would make it even clearer.
Let me run a mathematical concept by you. Assume a margin of 20% (for the sake of argument). 20% of $499 ends up being a bigger n umber than 20% of $299. If I, Joe Consumer, decide to buy a $299 device over a $499 device, Apple loses money in the grand scheme of things. They have to sell more of the cheaper device than they could have hoped to sell of the more expensive one.
The analysis is a joke designed solely to beat up the stock if it doesn't materialize.
Apple is still in the midst of building out their world wide footprint for the iPad and iPhone, with current designs; and keeping up supplies is already tasked to the max. They will make a boatload of sales and Education already buys them.
Quote:
Originally Posted by Venerable
Let me run a mathematical concept by you. Assume a margin of 20% (for the sake of argument). 20% of $499 ends up being a bigger n umber than 20% of $299. If I, Joe Consumer, decide to buy a $299 device over a $499 device, Apple loses money in the grand scheme of things. They have to sell more of the cheaper device than they could have hoped to sell of the more expensive one.
Yes but you are assuming that the lower priced item will cannibalize the more expensive. Barring all the technical obstacles, a device in between the iPod and iPad would no doubt sell like hot cakes and shore up (and expand) that part of the market. I think an 'in-between' Pad would seriously cut into the iPod Touch market but less so the iPad market. And cannibalization would be offset by increased sales. Often times the regular iPad is too big and more often the iPod is definitely too small. I think the smaller form factor would appeal to younger people primarily. At least at launch. in terms of gaming such a device would be an obvious winner.
The greater portability compared to the iPad and higher usability compared to the iPod makes it better as a reader but is also sure to open up new markets. Education is an obvious one, in car navigation and entertainment is another. I am sure there are many other professional uses that would crop up.
I don't see what's so difficult to grasp here. The iPad in it's current form is great for a general device. It does get a bit heavy
for gaming or reading books IMO.
Even if you drop the price to $299 you haven't deal with making a lighter device that is easier to transport, game and read on. Some people are
price sensitive and some are going to be weight/size sensitive.
If you look at the new iPad. Everything is over-engineered. Retina display with two light bars, 40nm basedband/broadband chips. HUGE battery. Monsterous A5x chips.
Let's look at the rumor mill prior to TNI (The New IPad) launch.
IGZO didn't make the cut
If Sharp's IGZO technology didn't make the cut for a March 2012 launch it or other technology (In-Cell Touch?) could be repurposed for a fall launch in another product.
Display technology is huge. If IGZO or in-cell touch is cheaper to produce, thinner and power efficient it becomes a winner.
Next up is the A5x which is absolutely a monster of a chip. We now know that iPad2 may have a 32nm A5 processor that is much smaller (read cheaper if yields are good)
It's an ideal processor for the next iPod Touch and the mythical iPad mini.
I don't think the NAND storage is as expensive as people think. It's near $1 per Gigabyte and slated to drop as low a $.40 per Gbyte next year. Now isn't the time to get cheap especially when
Apple owns Anobit technology which should enable safer use of MLC NAND.
Last but not least Broadcom and ST Micro cover the Wifi/Bluetooth and Inertial sensors (shared with iPhone 6th gen) and you have the distinct possibility of a sub $300 iPad mini.