The Concern Apple (NASDAQ:AAPL) has for its iPad Mini
With the progress of each year, Apple (NASDAQ:AAPL) has been known to change its strategy for its small tablets. 2014 is another year that has seen this change with its iPad Mini 3 launch with better features than previous iPad Minis. Apple’s (NASDAQ:AAPL) original small tablet, the iPad Mini, was launched in 2012 for the price of $329. This was considered expensive then with the Android tablets being sold for only $200.
Apple (NASDAQ:AAPL) was always the one to create a premium price which even then did much to attract its consumers. Another respectable competitor at the time was Google (NASDAQ:GOOGL) with its Nexus 7. The company always had a way with justifying the price of its products which led customers towards purchasing its products. The difference between the iPad mini and the full length iPad was a $170 price tag, however it did give the customer a bigger display and better specifications no doubt.
Each year the company adds a feature which in turn becomes a way for it to charge more. Apple (NASDAQ:AAPL) raised the cost of its Retina iPad Mini in 2013 with its launch, to $399. It had nearly the same specifications in the iPad Air which included the A7 processor. The only difference between both these models was the size of their displays. There have been slight differences in its iPad Mini launched in 2014 though.
The addition that the company made to the current year’s model – the iPad Mini 3- is its Touch ID with another $100 price increase compared to the iPad Mini 2. Even though the Touch ID technology is new in the market and is unbeatable in competition, it doesn’t justify why the company had a 33% premium installed into its price. It won’t be unusual for the iPad Mini 2 sales to increase as the $50 difference in its price compared to the prior iPad Mini 1 is justifiable given that it has a faster processor and a Retina display.
This is one reason that investors are eager for every new iPad the company launches. With the increase in sales of its iPad Mini 2 the company may experience pressure on its new iPads but it might also experience an increase in unit sales. This may be good for the company considering the market is decelerating. It’s difficult to determine the profile margin of the iPad Mini 2 however the iPad Mini 3 will definitely enjoy better margins all because of its new Touch ID feature with its price increase.
The company is focusing more on its iPad Air 2 compared to its iPad Mini 3 as the company spent no more than a minute discussing the product at its event a week ago. Apple (NASDAQ:AAPL) may be thinking about focusing more on other product lines rather than continually updating its iPads. However nothing is certain with Apple (NASDAQ:AAPL) as launching new products each year with multiple models of the same initial product is pretty common.