Analysts suspect smaller iPad would trounce rivals
By Rob Lever ,AFP Saturday, July 7, 2012, 12:14 am TWN
WASHINGTON -- Apple, which is expected to launch a mini version of its market-leading iPad tablet, could quickly overpower its rivals in the segment with the addition of the new product, analysts say.
The launch expected later this year however would probably prompt Apple co-founder Steve Jobs to roll over in his grave, given that the late technology pioneer ridiculed the small-screen tablets offered by his competitors.
Jobs once said the 7-inch (17.8-cm) screens for mini tablets should "include sandpaper so users can sand down their fingers" to be able to use onscreen keys.
But analysts say the market has changed since Jobs died last October.
Amazon's Kindle Fire proved popular last year, and the small-format Google Nexus 7 joined the Samsung Galaxy in the hot tablet market, dominated by the iPad, which has a screen of nearly 10 inches (24.6 centimeters).
Rumors about the smaller iPad have been swirling for months, but the Wall Street Journal reported this week that Apple's component makers in China are gearing up for mass production of the device.
"Despite what Steve Jobs claimed, the 7-inch form factor is popular and very useful if you want true portability," said analyst Jack Gold at J. Gold Associates.
"Also, seven-inch is less expensive and so they can compete for the lower end of the tablet market."
Analyst Tom Mainelli at research firm IDC said Apple has discovered that larger tablets are not universally popular, noting that users in Japan "with a more mobile culture" may prefer a smaller format, which also may be better for education in primary schools.
If Apple sells the new device at less than US$300, as widely expected, Mainelli said, "they put a hurt on all Androids."
Mainelli said that a mini iPad "ultimately grows the market," and that Apple does not appear to be perturbed by others in the field, since it makes a profit on the devices, unlike some other manufacturers.
Andy Hargreaves, an analyst at Pacific Crest Securities, said in a note last week that he expects Apple will sell 35 million iPad mini units in the coming year at US$299, "with 25 percent cannibalization of the larger iPad."
"Apple is a approaching a tremendous period of product cycle strength, with anticipated launches of a new iPhone, a 7.85-inch iPad and a refreshed 9.7-inch iPad that are likely to drive strong profit growth and corresponding stock appreciation," Hargreaves said.
Among the many reports circulating was one on the Apple tracker blog iMore, which said a new 7.85-inch iPad would come with "aggressive" pricing at US$200 to US$250.
This would "do to the tablet market what Apple did to the MP3 market in 2004 with the expansion of the iPod product line — leave absolutely no space for competitors," a blog post by Rene Ritchie said.
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