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Apple iPad Mini Will Cannibalize Bigger Brothers: Analysts

Handheld Device With 7.9-Inch Screen to Put Pressure on Tablet Rivals 10/23/2012 10:57 AM Eastern
Apple introduced the slimmed-down iPad mini tablet -- with a 7.9-inch screen, it can be held in one hand -- starting at $329, which will eat into sales of its higher-priced, 9.7-inch models but give the company a more competitive offering against rivals, according to industry analysts.
“Yes, this will cannibalize some of the iPad, but pull the camera back and you can see how it will increase the size of the Apple customer base,” independent mobile analyst Jeff Kagan said. “Those customers will get sucked into the Apple cloud and start buying other devices to share their stuff.”
Apple is expected to cut the price of the first-generation iPad mini to $200 in the fall of 2013, which would force some tablet competitors to exit the market, according to Julien Blin, directing analyst for consumer electronics and mobile broadband at Infonetics Research.
“Amazon and Google could be the last ones standing against Apple in the tablet market in the coming years based on their ability to offset a loss on the hardware through content sales and advertising revenue, respectively,” Blin said.
Apple currently dominates the tablet market with its worldwide share of the market rising to nearly 70% in the second quarter of 2012, according to research firm IHS iSuppli. Since introducing the first iPad in April 2010, Apple has sold more than 100 million tablets, according to the company.
“Many customers will not mind paying a $130 premium (Amazon [Kindle Fire HD] or [Google] Nexus 7 at $199 vs. mini iPad at $329) to get a mini iPad,” Blin said.
Also Tuesday, Apple announced the fourth-generation iPad featuring a 9.7-inch Retina display and a faster, Apple-designed A6X chip.
The iPad mini, to ship starting Nov. 2, is 23% thinner (at 7.2 millimeters) and 53% lighter (0.68 pounds) than the third-generation iPad. The smaller version provides up to 10 hours of battery life and features dual-band 802.11n Wi-Fi support for speeds up to 150 Mbps, double the Wi-Fi performance of previous iPad models.
“With its gorgeous 7.9-inch display, iPad mini features the same number of pixels as the original iPad and iPad 2, so you can run more than 275,000 apps designed specifically for iPad,” Philip Schiller, Apple’s senior vice president of worldwide marketing, said in announcing the product.
The iPad mini also includes a front-facing FaceTime HD camera and a 5-megapixel iSight camera on the back for taking still pictures and recording full up to 1080p HD video.
The iPad mini is available in 4G wireless models that include including LTE and DC-HSDPA connectivity, and Apple said data plans will be available from AT&T, Sprint Nextel and Verizon Wireless with no contract to let users sign up and activate service directly from the iPad.
The iPad mini with Wi-Fi only will be available in black and slate or white and silver on Friday, Nov. 2, for a suggested retail price of $329 for the 16GB model, $429 for the 32GB model and $529 for the 64GB model. The fourth-generation iPad with Wi-Fi models will also be available on Nov. 2, in black or white for a suggested retail price of $499 for the 16GB model, $599 for the 32GB model and $699 for the 64GB model.
The cellular versions iPad mini and fourth-generation iPad will start shipping “a couple of weeks” after the Wi-Fi-only models.
The iPad mini with Wi-Fi + 4G will be offered for a suggested retail price of $459 for the 16GB model, $559 for the 32GB model and $659 for the 64GB model. Fourth-generation iPad with Wi-Fi + Cellular for AT&T, Sprint and Verizon Wireless will be offered for a suggested retail price of $629 for the 16GB model, $729 for the 32GB model and $829 for the 64GB model.
Additionally, Apple said the older iPad 2 is still available at $399 for the 16GB Wi-Fi model and $529 for the 16GB Wi-Fi + 3G model.
Customers can begin pre-ordering all models of iPad mini and all models of the fourth generation iPad on Friday, Oct. 26.
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