Stop. The. Presses.
Those of you thinking that the upcoming iPad Mini will be priced to knock the wind out of Apple’s competitors may be in for a rude awakening tomorrow. According to All Things D, industry analysts expect Apple’s 7.85″ slate to be priced at the top of the market for 7-8″ tablets, with expected retail pricing starting at $299 to $349 for the base model.
Google’s Nexus 7 and Amazon’s Kindle Fire HD tablets, the industry leading tablets in the smaller form factor market, retail for $199 and up, and many expected Apple to price the iPad Mini to “go for the kill” against these tablets. Google and Amazon achieve the sub-$200 price points by eating the loss in margins with hopes of making up for the hardware subsidy by selling lots of content. Apple could reasonably do the same with the iPad Mini, as customers have shown time and time again that they’re willing to spend lots of money in Apple’s ecosystem, but Apple has yet to take the subsidized hardware approach with any of its products, save (maybe) the relatively niche and self-proclaimed hobby project Apple TV.
The iPad, iPod Touch, and iPhone are all priced at the high-end of the market, and they’ve sold quite well to date, with each at top of their respective markets. These devices have achieved this level of success despite competitor offerings matching or beating them in terms of pricing. Similarly, with the MacBook and iMac, Apple is gaining ground in the PC industry even though its prices are high and the industry as a whole is in a slump. Apple has shown no signs of lowering prices in an attempt to gain a larger market share.
Apple historically doesn’t undercut on pricing regardless of where it falls in the market, and we have no reason to expect this trend to change with the iPad Mini, a product that responds to consumer demands (smaller tablet form factors) rather than the limited successes of the competition.
So yes, friends, the iPad Mini is certainly going to be priced at the higher end of the market, but don’t panic. You, me, and millions of others are going to buy it anyway, and Apple will be smiling all the way to the bank.