I've been thinking about all the hullabaloo over the price of the new iPad mini. Everybody feels that Apple blew it by not getting the price down to something competitive with Google and Amazon. Upon reflection, this really doesn't surprise me. Both Google and Amazon have stated that they are selling their small plastic-based tablet products essentially at cost in order to get market share. They have a problem. Apple is beating their pants off in the tablet market and they need a toehold. Apple enthusiasts are eager for Apple to stifle the competition by making a superior iPad mini at roughly the same price. As they see it, Apple has its boot on Google and Amazon's neck and needs only to push to own all aspects of the tablet market for the foreseeable future.
Apple however does not play that game. Apple likes to make money. I can't really fault it for that. The iPad mini starts at $329. the Google Nexus device starts at $199. That Google device only has 8 GB of storage whereas the iPad mini has 16 GB. To get a Google Nexus tablet at 16 GB, you need to spend $250, $79 less than the iPad mini.
So a fair comparison is the $250 Google Nexus device versus the $329 iPad. What does that extra $79 get you? For starters, the iPad mini is better designed and built. I'll take aluminum over plastic any day of the week. Additionally, the iPad mini is an iPad in all senses of the word. It runs, natively, all of the excellent iPad software. The Android tablet software is not there yet. (That thing I wrote about Android apps nearly a year ago still stands.)
When I was on the Mac Roundtable this week, I made the comment that this device isn't necessarily aimed at us nerds. We all love our large-screen iPads with retina displays and a lot of us don't see a good reason to go to the smaller device. That's okay. Apple already has our money. I suspect that the market for the iPad mini is probably less nerd-inclined than that of the larger iPad. The iPad mini is aimed at people who want a quality smaller tablet device. Apple thinks there are a lot of people willing to shell out an extra few bucks for such a device and I suspect they are correct. All of this said, I agree that if they were able to hit $299 instead of $329, a lot more people would have gotten past the price barrier but Apple is a very successful company and I'm sure people much smarter than I already did that math and the iPad mini will do just fine at $329.
The real interesting part of all of this discussion is the collective concern of Apple enthusiasts over Apple blowing it. All of us remember the times when Apple was nearly on the chopping block and there's this sort of cultural fear that somehow our beloved company is to stop making our beloved products. As a result, we all wring our hands and rend our garments in fear every time Apple makes a big move. Moreover, when we see any other company being remotely successful in the same space as Apple, a small part of our brains think it is Microsoft Windows all over again. The good news, my brothers and sisters, is that those days are over. There is not going to be a single winner like there was for the Mac vs. Windows days this time. (Not even Apple.) Apple gets that and is more than happy to let others fight over the low margin end of the market and gobble up the high-end of the market where Apple can actually make a profit and, therefore, keep the lights on.
Jason Snell said it best in this week's Macworld podcast, "Is there a cheap tablet market or is there a small tablet market?" I think the latter and so does Apple. I'll also go out on a limb and say that, with the iPad mini's sales starting tonight at midnight, they'll be sold out before I wake tomorrow.