1.3 Case Study

Apple Unveils iPad Mini

By Independent News ServiceWednesday 24th of October 2012 — 01:49:00

Apple Inc. Tuesday introduced the iPad Mini, the first major extension of the company’s product line in more than two years, in an effort to further solidify its leadership in the mobile market.

The smaller device, which was expected, comes with a 7.9-inch display, and is roughly half the weight of existing models, Apple said. It will start at $329 for a model with 16 gigabytes of memory and be available On Nov. 2, with preorders beginning this Friday.

The iPad Mini would compete squarely with devices like Amazon.com Inc. ’s Kindle Fire and Google Inc.’s Nexus 7, already on the market. These and other roughly seven-inch devices from Samsung Electronics Co. and others will account for about a fifth of the tablet market this year, according to Piper Jaffray.

Apple also unveiled a fourth-generation model of its existing iPad, just seven months after the company announced a new model it was simply called “the new iPad”. The latest iPad, Apple said, has a new processor chip, the A6X, and wider support for LTE wireless technology.

The new iPad Mini

The event’s marquee announcement, the iPad Mini, holds an odd distinction as being a product that Steve Jobs, Apple’s late co-founder, had dismissed. Two years ago, Google, Samsung and others began releasing devices with a 7-inch diagonal screen, he said that smaller tablets were likely to fail in the market. Apple executives here suggested those products simply weren’t very good.

“Others have tried to make tablets smaller than the iPad, and they have failed miserably,” said Phil Schiller, Apple’s marketing chief, at an invitation-only event here.

Mr. Schiller added that competitors’ products were less usable, and that Apple had taken its time to ensure features, such as the screen and performance, were good enough that they would offer a clear benefit to customers.

“Competitors are making compromises with their products” he said, “We don’t.”

Following the product news Tuesday, Apple’s shares dropped, finishing the day down 3.3% to $613.36.

The iPad Mini comes as the Cupertino, Calif., electronics giant continues to refine its focus on mobile computing. The iPhone, iPad and other mobile products have been at the heart of Apple’s renaissance since it started to sell the original iPod music player in 2001.

Apple said it has sold more than 100 million iPads since the product launched two years ago, though competitors’ products, including Samsung’s tablets and devices, such as the Galaxy Tab and Galaxy Note, have become increasingly popular among consumers. While Samsung’s smartphones have topped Apple’s as the most devices to have been shipped to customers throughout the world, Apple has been able to maintain a leadership position among tablet makers.

Despite increasing competition, Apple’s devices have held onto the top spot world-wide, representing nearly two-thirds of the industry in 2011, according to industry researcher Gartner. Devices built using Google Inc.’s Android mobile operating system, such as Samsung’s devices and Amazon.com’s Kindle Fire tablets, represented nearly 37% of sales.

But Gartner said, Apple’s leadership is expected to fall to 53% of the industry this year and 44% in 2013.

Mr. Schiller said he expects the iPad Mini will help Apple maintain its momentum.

Julien Blin, an analyst at Infonetics Research, said the new device didn’t disappoint us, and will likely be a key driver for Apple in industries such as education, as well as emerging markets like China. He also expects the device to help Apple increase its market share.

“Most importantly, the iPad mini is likely to force select computer makers to exit the tablet market in the coming years, as we expect Apple to drop the price of the iPad1 to $200 next year,” he added in a note to investors.

Analysts had been citing prices as low as $250 for the device, coming in closer to competitor’s prices of around $199. At $329, Apple is charging a premium, but Mr. Schiller said the differences from competitors justified the price.

Earlier in the event, the company announced several other hardware developments, including a substantially restyled version of its popular iMac desktop computer that includes a much thinner design.

Apple said the new iMac measured just 5 millimeters in thickness, took up 40% less space than its predecessor and came with a new storage device that combined a spinning disk with flash-memory chips. A 21-inch version of the computer is expected to ship in November at a starting price of $1,299. A 27-inch model arrives in December at a starting price of $1,799, Apple said.

Previously, Apple at an event here unveiled a new 13-inch version of its popular MacBook Pro laptop, updated with what the company calls its retina display.

The new portable, almost a pound lighter than earlier models, is priced at $1,699 — roughly $500 less than Apple’s 15-inch version in the Pro line. Apple said the new portable will ship on Tuesday.

Apple also introduced a new version of its ultra-small desktop computer, the Mac Mini, at a starting price of $599.

Tim Cook, Apple’s chief executive, used the event to rattle off a series of statistics about the company’s recent success—including the fact that it has sold 100 million iPads since the product was launched in 2010. Apple previously said it had sold 84 million iPads as of the end of June.

Mr. Cook also said Apple sold more than 3 million of its new iPads, and that after one month, 200 million copies of its new iOS 6 mobile software are in use.

He called it “the fastest upgrade rate of any software in history” that the company is aware of.

Source: Wall Street Journal

Discussion Questions

1.What did you learn from the article?

2.What is Apple’s strategy of product in the market?

3.If you are CEO of Apple, how do you chose the strategy of promotion?