Apple Considering Lower-Priced iPad Mini at $199-$249?

Along with his recent research note addressing Apple's notebook launch plans, KGI Securities analyst Ming-Chi Kuo has also published a note examining Apple's iPad prospects.

In particular, Kuo looks to the iPad mini as the future of the company's iPad portfolio, but with Apple's efforts to bring a Retina display to the device said to be pushing a launch back to the fourth quarter of this year, he suggests that Apple may be looking at a lower-priced iPad mini.

Prior to iPad mini 2 launch, Apple might roll out a more affordable iPad mini to compete with Android products. To cut costs, Apple might push for lower component prices, use a more advanced process to produce the A5 processor, simplify metal casing production, remove the rear camera, cut storage to 8GB and find more component suppliers to lower costs. We think this cheaper iPad mini retail for US$199~249.

Kuo does not believe that such a device would offer a significant boost to Apple's overall iPad sales, but it could help stave off erosion at the low end of the market at the hands of cheaper Android-based tablets.

ipad_mini_white_side
The $199-$249 price range is one that many potential customers had hoped Apple would be able to hit with the original iPad mini, but the company surprised many by introducing the iPad mini starting at $329. Even at that pricing, Apple has noted a number of times that the iPad mini's profit margins are below the company average.

Apple is said to be pursuing a similar strategy for the iPhone, working on a lower-cost iPhone with a polycarbonate shell rumored for launch later this year.

Overall, Kuo sees relatively small sales growth for the iPad in 2013, with the full-size iPad being cannibalized by the popular iPad mini and the upgraded iPad mini with Retina display not debuting until late in the year.

With Android tablets also beginning to gain footholds in some markets and driving Apple's estimated share of the tablet market below 50% in recent quarters, Kuo expects that Apple will remain competitive but see relatively slow growth until the launch of the Retina iPad mini.

Related Roundup: iPad mini 5
Buyer's Guide: iPad Mini (Caution)

Top Rated Comments

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95 months ago
i could see the current mini dropping to $229, and the new mini taking over the $329 spot.
Score: 50 Votes (Like | Disagree)
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95 months ago
Apple will probably just continue selling the previous generation mini at a reduced price when the new ones are released.
Score: 32 Votes (Like | Disagree)
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95 months ago
iPad sales were up 65% YoY in the 1st quarter, so price apparently isn't an issue.
Score: 23 Votes (Like | Disagree)
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95 months ago
In other news, Mercedes is considering a compact econo sedan to compete with Kia and Rolex is considering a line of slap watches.
Score: 12 Votes (Like | Disagree)
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95 months ago
If it sells for $229 it will be Apple's best selling iPad. Sales of the full size will fall drastically, IMHO. People will buy because of price.
Score: 12 Votes (Like | Disagree)
Avatar
95 months ago
There is absolutely no way they would sell an 8GB device again. My sisters's iPhone 4 fills up with the size of iOS alone and like 2 apps.

And I don't think they would take out a rear camera.

The current iPad mini will stick around for a long time at a lower price point....just like the iPad 2.
Score: 11 Votes (Like | Disagree)

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