|iPad mini (front and rear)|
I heard a report on the local news Friday morning about how there weren’t the same long lines for the iPad mini (which launched on November 2nd) as there were for the iPhone 5 and iPad 3, and it got me thinking. With legions of Apple fans around the world, why would the iPad mini go on sale with less fanfare than other devices from months or years past? Is there a crack in the facade of a company that can seemingly do no wrong when it comes to the launch of a new product? Let’s dig deeper and see if there is evidence of what I believe to be true: by making the iPad mini, Apple has diluted their own brand and potentially made a serious business blunder.
These comments have been picked apart ad nauseum, but the salient point is this – at the time, Jobs did not envision his company making a smaller iPad product because he felt that they were ahead of the curve, and other OEMs would be forced to compete on Apple’s terms. Until, lo and behold, Apple has in fact now made a 7 inch product – they now are competing on someone else’s terms. Tim Cook, Apple’s current CEO, begs to differ however:
“Let me be clear: we would not make one of the 7-inch tablets,” Cook said in response to a question about why the company seemingly changed its mind. “We don’t think they’re good products, and we would never make one. […] One reason is size—the difference in just the real-estate size in 7.9-inches versus 7-inches is 35 percent. When you look at the usable area, it’s much greater than that: it’s from 50 to 67 percent.”
|Right to Left – Kindle Fire HD, Nexus 7|
Let’s not do as Cook did and split hairs: Apple made a 7 inch tablet to compete with the Kindle Fire and Nexus 7. While Asus recently announced that they are selling almost 1 million Nexus 7 devices a month, Piper Jaffray analyst Gene Munster is predicting between 1 and 1.5 million iPad mini’s will be sold on launch weekend. However, this figure is sharply down compared to 3 million iPad 3’s sold during its launch weekend. Some might say that the iPad mini lines are shorter due to internet pre-sales; long lines for iPhone 5s sold within the last 3 months (which were also available for pre-sale) would beg to differ. Some consumers might be holding out for the 4G enabled version slated for sale later in November. Could it instead be as some critics have said that people are better served if they want an iPad mini to wait for the improvements that will likely be coming in an iPad mini 2 next year?
The business world in general was concerned after the iPad mini announcement, and Apple’s stock price has been dropping ever since, now hovering around $580 a share (as of this weekend), down close to 18% from its previous record high of over $700 per share. Pricing is a factor here, and the iPad mini’s $329 starting point is well above those of Android competitors. Screen and processor specs are also lower end, compared to current iPad tech, and also lower than those of Android competitors. In addition, there was a recent announcement of a management shake up at high levels within Apple (see more details here); all of these things paint a clear picture to me: Apple is becoming aware that they can no longer do business as they have for so many years and expect consumers to continue to support them.
The Apple brand has been as much about innovation and forward thinking as it has been the “cool” factor of their products. The last truly innovative product released by Apple was the original iPad, more than 2 years ago. Apple has been all but forced into moving into the 7 inch tablet space by the success of their competitors. And what they did was release a product that isn’t as good one of their own, similar products released earlier in the same year (iPad 3) and is priced in such a way that it doesn’t really give anyone who’s not already a loyal Apple fanboy a compelling reason to rush out and get one.
By not innovating and moving first to dominate this smaller tablet space, they have allowed Google (and their partners) as well as Amazon to take money out of their pockets. Without innovation – all you’re left with is cool. And cool comes with a hefty price tag these days.