How Likely is Apple to Release a $200 7-inch iPad Mini?
How Likely is Apple to Release a $200 7-inch iPad Mini- September 12th, a date most members of the iOS community have come to recognize as the day Apple is rumored to hold their iPhone 5 unveiling event. While the next-generation iPhone will certainly dominate the upcoming conference, many reputable sources have suggested that it won’t be the only device shown and demonstrated. Numerous reports have proposed the idea of a smaller tablet with a significantly cheaper price tag than the third-generation iPad. Unofficially dubbed the iPad Mini.
Said to feature a screen measuring approximately 7.85 inches diagonally, the more portable tablet would be introduced into the market as a cheaper alternative to the full-fledged 9.7-inch iPad and as a formidable rival to the likes of Google’s Nexus 7 tablet.
As highlighted in a recent report, Apple has a long history of maintaining and selling their laptops in a variety of sizes. Why not do the same with their iPad line? They’d certainly dominate the recently established 7-inch tablet market and effectively dethrone both Amazon’s Kindle Fire and Google’s Nexus 7.
Speculated to have a starting price point as low as $199, the iPad Mini would certainly be an attractive alternative to the more expensive third-generation iPad, which starts at $499. But how would it make financial sense for Apple to offer a smaller iPad at such a reduced price over the current 9.7-inch model?
What’s the likelihood of Apple releasing a $199 iPad mini running iOS 6
Reuters perviously reported that Apple’s gross profit margins for the iPad range from 23 to 32 percent - generating upwards of $13 billion dollars in profit from iPad sales alone. For those figures to be accurate, even at a 32% profit margin, that would mean Apple’s manufacturing cost averages out to $378 per unit. According to iSupply, materials and manufacturing costs for the 16GB iPad 3 model is estimated to be in the ball park of $316.05. Additionally, the 16GB iPad 2 is thought to have a significantly cheaper manufacturing cost of $240.10.
If an iPad Mini is released, it’s likely that Apple will equip the tablet with components that more closely match the iPad 2 than the new Retina Display iPad. With that said, Apple’s current cheapest iOS device available for purchase is the $199 8GB iPod Touch. The device’s estimated manufacturing cost is estimated at roughly $150, a 30 percent+ profit margin for Apple. If the cheapest model iPad Mini will be sold for the same cost as the iPod Touch with iPad 2-quality parts, how would Apple receive the premium margins the company is used to?
As suggested by iMore, an iOS device with a profit margin of less than 30 percent would cause investors to rethink their choice in stocks. However, that’s not to say there won’t be an iPat Mini. If Apple does release a tablet to compete in the 7-inch market, it will likely have a starting price closer to $299. Until Apple officially announces a smaller tablet, the finer details remain a mystery. Just note that it likely won’t be sold for a $199 price like its competitors.
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