Size matters as Apple goes mini

Apple has moved away from the late Steve Jobs’ view that smaller tablets were ‘dead on arrival’ with this week’s launch of the iPad Mini

IN 2010, APPLE boss Steve Jobs told journalists that consumers didn’t want compact tablets.

“The seven-inch tablets are tweeners – too big to compete with a smartphone and too small to compete with the iPad,” he said, before asserting that the smaller tablets available at the time were “dead on arrival”.

“This size isn’t sufficient to create great tablet apps, in our opinion,” he said.

With more than 100 million iPads sold around the world, Apple had obviously hit on a product that appealed to consumers.

But this week, the company did somewhat of a u-turn, with the unveiling of the much-rumoured iPad Mini.

It’s not quite a 7in tablet – its screen is 7.9in – but it’s certainly more compact than the 9.7in display iPad.

And it seems to run contrary to what Jobs believed, that tablet users wouldn’t like sacrificing some of that screen to get a more compact device.

With fierce competition from smaller, cheaper tablets, it seems as if Apple may have caved to market forces.

The new iPad Mini will have the same screen resolution as the larger devices, Apple’s senior vice president of marketing Phil Schiller promised, but in a thinner, lighter package.

But it’s not the first time that Apple has seemingly changed its mind, with everything from the Kindle e-reader to video on iPods getting an initial negative response from Jobs at some point.

Other compact tablets have done well in the market. The Kindle Fire and the Nexus 7 have both been good performers from Amazon and Google. Both products are believed to sell for close to cost price.

That’s where Apple’s strategy differs from its rivals. At between €339 and €709 for the different models, the device is significantly more expensive than its rivals, a move that could prove challenging for sales.

The pricing was defended by Schiller, who believes consumers will be willing to pay more for quality he claims is not in the Nexus 7 or the Kindle Fire.

And some analysts also backed up Schiller’s views.

“Apple has always been a premium hardware manufacturer. It’s basically a hardware company and they don’t have Google advertising or Amazon’s online store to fall back on,” said Destination Wealth Management CEO Michael Yoshikami.

“But people are happy to pay a premium because it’s quality hardware, and the ecosystem cannot be underestimated.”

But not everyone was positive about the new device.

“It’s coming in the range that most were grumbling about and that, quite frankly, we’re a little bit concerned about,” JMP Securities analyst Alex Gauna said.

“It’s a little confusing at this juncture to try and figure out how it fits into the line-up. Is it going to cannibalise the more expensive iPad?” he said.

“It is worth noting that there are zero-margin products out there competing with them now . . . and that is presenting some challenges to Apple.”

The iPad Mini will start shipping on November 2nd, starting with the wifi-only models, with preorders opening from tomorrow