Google’s Nexus 7 began shipping on Friday. That means that consumers now have, in their hands, another 7-inch tablet that will compete in a market that has been dominated by the iPad for nearly three years. There are now three major tablets on the market that can be purchased for $200.
In light of the new, lower-cost model, analysts are predicting that Apple will sell the rumored iPad mini for a fraction of the cost of one of the big boys in order to compete.
The New York Times recently reported on the rumored 7.85-inch Apple tablet as if it were already news from Tim Cook himself. The Times wrote, “The company is developing a new tablet with a 7.85-inch screen that is likely to sell for significantly less than the latest $499 iPad.”
Earlier this month, analysts were speculating that the smaller iPad would come with 8GB of memory and have a $299 price point with a 16GB model selling for $399.
An 8GB, smaller-screen device sounds more like an iPod giant than an iPad mini. Blogger Horace Dediu told The Times that Apple could position it as a next generation of the iPod touch rather than as an iPad mini. I don’t think consumers would feel comfortable with that.
The New York Times heard from unnamed sources familiar with the rumored iPad mini who said, “Apple’s plan for a tablet with a smaller screen is part of a textbook business strategy: to lure customers who want different sizes of tablets into the iPad product family.”
They did it at the turn of the century with the iPod and eventually dominated the entire digital music player market, capturing 80 percent for half a year straight. The iPad maintained a 80 to 90 percent lead over tablets for over a year and, even today owns between 60 and 70 percent of the market.
If Apple does produce a smaller, lower cost iPad this fall, tablets may go the way of the MP3 player, which went the way of the dinosaur a few years back.