Apple in 7"

By now the existence of the iPad Mini is taken for granted and all sources point to the event next week for the public launch. You can find a quite comprehensive summary of the rumors in this The Verge article.

The iPad Mini, even if it's still a tablet, is new territory for Apple. And let's not forget that a 7 inch tablet was out of the question as long as Steve Jobs was the capitan of the ship.

I should declare now that I'm not an Apple fan but I recognize Steve's greatness. If I was Tim Cook I surely would take Steve's advice and stay out of that market.

The 7" tablet market already has a fair share of devices and even some good ones. So it will not be so simple having a top seller there as it was with the original iPad.

The issue is that it is a segment dominated by the cheap tablets: Kindle Fire series and, more recently, the Nexus 7.  The competition has no margin on the hardware but gets money from content selling. But that's really not Cupertino's business: they sell premium devices and have a very solid margin per unit sold. Their content selling business is not as big as Amazons' and so the margin on the hardware can't go as low.

Reducing some margin could get Apple to the 300$ (or €) price tag, but to go below I think  they will have to cut on materials and production costs. The main thing to give up would be the Retina display, using the cheaper panels of iPad 2 instead, as some sources suggest. With that they could cut some on all other system resources needed for the advanced display, save some other money and get to the 250$/€ mark where rumors put the iPad mini basic model. I guess that would be 16GB WiFi only.

So what you get? You lose the Retina display that is tightly associated with the Apple brand, some quality in other component and you're left with a tab that at best is in the same league of the competition.

Rumor has that Google is refreshing its Nexus 7 line at their October 29 event, possibly with a even cheaper model and a more expansive one with 3G; Amazon has just launched its new Kindle Fire lineup and Microsoft is entering the tablet space too on October 26. Of course Microsoft Surface will not be for the same market segment of the iPad Mini but, in my opinion, will be an earthquake for the tablet market in general (more on this in my next posts).

Anyway that's just some thoughts on  rumors, we will have to wait October 23 to see what Tim has up his sleeve. Even if the iPad Mini will actually end up a disappointment, I wouldn't be surprised if it sells millions of units. That's Apple real magic!