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Analysts say the iPad Mini will turn new tablet buyers into Apple fanboys, might also help Windows 8

by Doug Drinkwater

October 22 2012

Apple's 7.85-inch iPad Mini is expected to be announced Tuesday with availability set for early November. But at what price?
Apple's 7.85-inch iPad Mini is expected to be announced Tuesday with availability set for early November. But at what price?

How will the iPad Mini affect the rest of the tablet market? Market researchers tell TabTimes that the tablet will lock new tablet owners into the Apple ecosystem, challenge the Nexus 7 and Kindle Fire and give a surprising boost to Windows 8 tablets.

Apple’s iPad Mini will be a family tablet

“I think the market impact will be significant,” says Creative Strategies principal analyst Ben Bajarin.

“With the huge interest in tablets and iPads in particular, a lower cost yet still premium quality tablet experience will bring more and more consumers into the tablet market. I think this appeal will be to people not in the market yet, and those looking for a family tablet over a primary tablet.”

So, who will be the biggest loser out of the iPad Mini’s introduction? A cross-section of analysts interviewed by TabTimes agree that those running on Android are going to struggle.

“I think Android tablets are the biggest losers,” argues Bajarin, who adds that Amazon will continue to appeal to a ‘specific customer set’ and that the family-nature of the iPad Mini will more likely make younger tablet users become iOS tablet owners in the future.

“There will be two things that Android vendors will have to battle with; brand and ecosystem,” adds Gartner’s Carolina Milanesi.  “You will have a device that will be comparable in features to a Nexus 7 but will carry the Apple logo and support all the apps already in the market.”

A smaller iPad is bad news for Amazon

The 7.85-inch screen size of the iPad Mini will make the device much more a content consumption device than its bigger and older brothers, say the analysts, and this could see it cannibalize sales of the iPad 2, iPod Touch as well as Amazon’s Kindle collection.

“I think you’ll see it take sales away from the Kindle family of devices and the Kindle app itself, as Apple will be marketing the tablet as an iBook, iTunes consumption device,” says Salman Chaudhry, mobile analyst at Context.

“If [Amazon] doesn’t see the iPad Mini as a threat, there’s something wrong with them. The Kindle Fire may be $159 but the average consumer will be prepared to pay another $80 or $90 for an Apple product.

“And I think you can expect a base of iPod Touch users to move to the iPad Mini too. At $249, people will be willing to pay $50 more to get an iPad Mini for listening to music, watching videos and browsing the web.”

Milanesi agrees with Chaudhry that Apple will compete with the Kindle family for digital book sales, and expects Apple to have some news in this regard when announcing the iPad Mini.

“If Apple goes with the iPad Mini, I would expect the focus to be on content so I would expect to hear something on the services side, either with books or video,” said Milanesi.

The analysts agree that, cannibalization or otherwise, the iPad Mini will be the first step to bring new tablets owners into the Apple family. 

“For Apple it’s important to get consumers into their ecosystem. The 7" will be a step in that direction,” says Bajarin.

And…iPad Minis may also boost Windows 8 tablets

While the iPad Mini is expected to stifle competition from Android devices, probably one of the more surprising comments on market competition comes from Context’s Chaudhry, who says the introduction of the iPad Mini could actually help Windows 8 tablet sales.

“Off the back of this I see this being good for Windows. If the top selling Android device is the $199 Nexus 7 then that’s where the bar will be set for Android devices. And with the iPad Mini also coming in there it will be difficult for OEMs like Acer and Samsung manufacturing Android tablets when the market expects to pay around $199. 

"There would be no profit as they could not compete with the price. Meanwhile Microsoft, as we've seen with the recent pricing announcement, is clearly where the money will be for OEMs as there is no device acting as a hindrance to good margin."

Doug Drinkwater is the International Editor of TabTimes and is based in London, England.

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