Apple's iPod touch pricing doesn't leave space for the iPad mini

Apple's iPod touch pricing doesn't leave space for the iPad mini

Summary: If Apple has priced the iPod touch, starting at $299, then how does this affect how the technology giant would price the much-anticipated (but as yet totally mythical) iPad mini 7-inch tablet?

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TOPICS: Apple, Hardware, iOS
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Along with unveiling the new iPhone 5, Apple also announced new iPods. One iPod that saw a major update was the iPod touch, or Apple's 'iPhone without a phone'.

This is all very well and good, but rumors are abounding that Apple will lift the lid on an iPad mini with a 7-inch screen sometime next month. Where does the new iPod touch leave the iPad's little brother?

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The fifth-generation iPod touch -- which Apple says is the world's most popular player, and the most popular portable gaming device -- has received a significant upgrade. Along with being thinner (6.1 mm) and lighter (88 grams) than the previous iPod touch, Apple has given it the same 4-inch display as the iPhone 5 and the same A5 processor that's been used in the iPhone 4S.

There's also an updated 5-megapixel iSight camera, the new Lighting dock connector, and a larger battery.

There's also a storage bump. The fourth-generation iPod touch came in 16GB and 32GB flavors, while the new fifth-generation iPod touch comes in 32GB and 64GB flavors.

And to top all this off is a price bump. The 32GB version will cost $299, while the 64GB version will set you back $399.

And then we have the supposed iPad mini.

The biggest iPad mini conundrum is pricing. The iPad 3's pricing starts at $499 for the base model, while the iPad 2 starts at $399. An iPad mini would ideally need to be priced at or below $299 in order to remain competitive in the face of the iPad 2 and 3.

The problem with trying to scale down the iPad 3 is that the numbers don't add up.

Even assuming that making a smaller iPad costs 20 percent less than making a full-sized model -- factoring in that components are now-cheaper than they were back in March -- the component and marketing costs of the devices would still be in the region of $250.

Believe it or not, shrinking an iPad doesn't shrink the price by that much.

But if Apple has priced its iPod touch, with its 4-inch screen and powerful A5 processor, at $299, can the Cupertino giant really come out with an iPad mini -- one that sports a 7-inch screen, bigger battery, and similar processor -- at the same price point?

Seems unlikely given the fact that the iPad mini would essentially be a scaled-up version of the iPod touch, or a scaled-down iPad.

Even if Apple dropped the starting storage capacity to 16GB, I doubt that would shave much off the price. After all, storage doesn't actually cost that much.

Apple's decision to price the iPod touch starting at $299 doesn't leave much room for the iPad mini. Would the market support a price of $350 when a full-sized iPad 2 costs $399, and the latest model only another $100? Since Apple firmly believes that its loyal customers will pay $40 for a cable or $9 for a wrist strap, then maybe people will, without question, pay whatever it says on the price tag for an iPad mini.

Given that we've not seen a single piece of hardware leak from the factories in China -- in stark comparison to all the iPhone 5 leaks -- perhaps the 7-inch iPad only exists in the minds of the pundits and analysts.

Image source: Nickolay Lamm/InventHelp, CNET.

Topics: Apple, Hardware, iOS

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18 comments
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  • Hey, you said it was damn good!

    Hey your journalist James Kendrick said http://www.zdnet.com/confession-of-a-nexus-7-owner-ipad-mini-will-blow-it-away-7000002759/ that it will blast away the Nexus!!!!
    Is it too much to ask for the excuses to a journalist for comaring an existing product with one from is very mind????
    If I was Google I will sue him for commercial damage....
    massimo.nanni@...
  • Apple Fanboyism = Triumph Of Hope Over Experience

    It was never likely that Apple was going to do a 7" tablet. That was what the market wanted, not what Apple wanted. So forget it. They're not going to upset their carefully-segmented product strategy just to make a few extra sales--that has never been The Apple Way.
    ldo17
    • What the market wanted.

      Please answer the following questions:
      1. How many iPads have been sold in the last 12 months?
      2. How many 7" tablets have been sold in the past 12 months?
      3. If the "market" buys more iPads than 7" tablets, how can you say that 7" tablets are what the market "wants"?
      ssaha
      • In Case You Hadn't Noticed...

        ...the Asus/Google Nexus 7 is selling like hot cakes. Why do you think people are suddenly asking about 7" tablets?
        ldo17
    • Over 84 million iPads sold to date

      I think it's clear what the market wanted. Companies turned to smaller cheaper 7" displays to have a chance at competing with the larger more popular 10" iPads. And Apple's supply chain dominance.

      Regarding Apple doing or not doing a smaller iPad. They were rumored to intro the smaller iPad in October. Let's see. I will just say that every other rumor about the iPhone thus far came true.
      dave95.
  • Super Genius

    What? You mean the Mini won't sell well at $349! That is just Crazy Talk! Those things will fly out of the door! I'm starting to figure out apple now..."What problem? Ok then, we'll add a second row of Geniuses to help the idiot Geniuses on the first row....That is Brilliant!"
    adult001
  • ipod touch

    I was surprised at the $300 ipod touch price.

    Seems completely ridiculous.

    Especially if with the ipads having much better CPU/GPUS.
    wendellgee2
  • Hmm...

    Of course, no one's proven Apple has any plans doing an "iPad Mini", 7-8" tablet. It's been a big rumor, but is that driven by actual knowledge of what's coming, or is it just a reaction to the success of Amazon and Google 7" tablets?

    But truth is, there's plenty of room for the 7" tablet. My bet was always on a $349 base price. That would be a 16GB model, most likely. No real conflict with the iPad Maxi or the iPad Nano, er, the iPod Touch. Apple already has a few price overlaps... if this is a critical market to enter, they'll enter it.

    The $200-$300 entry guesses for the iPad Mini are incorrect. Apple's never been a low-price competitor. If Amazon and Google are selling at $X, you absolutely know that Apple's going to be selling at $X * (1.5-2.0) or so. Sure, some companies have put out tablets at the same price point as Apple's. Most have failed.

    Keep in mind what's actually in a tablet. Start with a netbook. Toss out half the RAM and half the storage, the keyboard, most of the case, most of the ports. Replace the Intel Atom with your choice of ARM SOC, at half the price or less. Keep the screen, maybe shrink it a bit. Cut the battery in half.

    In short, tablets ought to cost less than Netbooks. Apple's does -- their version of the Netbook is the Macbook Air... the iPad costs about half the price of Apple's lowest cost laptop. Lots of companies saw "gold rush" in the sales of the iPad, and tried to copy Apple on market position. But if Mercedes has a hit model, Ford can't introduce a similar model at the same price and expect many sales. Same deal here.
    Hazydave
  • Different product category

    If someone's in the market for a portable and pocketable gaming/music player/media device, then they're not looking at an iPad or iPad mini. Likewise if someone's in the market for a smaller iPad, they're not looking to the iPod Touch. Different markets, different product category.

    Samsung I believe currently sells their 5" Galaxy player 5.0 and their 7" Galaxy tablet at around the same price ($250).
    dave95.
  • Wrong about 4th Gen iPod Storage Capacity

    "There's also a storage bump. The fourth-generation iPod touch came in 16GB and 32GB flavors, while the new fifth-generation iPod touch comes in 32GB and 64GB flavors."

    I guess I must have a mutant 4th gen iPod Touch with 64GB of storage. Or...64GB was offered in the 4th gen model.
    noibs-0cf43
  • Last living journalist who doesn't think theirs going to be a Mini!

    When I saw the IPod Touch price of $300.00 I also experienced a how is this price going to work with a Mini moment.

    But, 7 inch tablets are exploding.
    By all estimates Apple could immediately dominate this market.
    In fact all kinds of supposed leaked hardware stuff has been showing up.
    If they don't do it they are virtually handing a very lucrative market to Amazon, Google and Microsoft.
    The cost to them is negligeble smaller case, smaller screen, no software development and pretty much no hardware development.
    If Apple doesn't do it, it will be a several billion dollar joke on Apple.
    Apple doesn't have that much of a sense of humor.
    Probably last hurrah for IPod, but the Mini is real, priced under $300.00 and in time for Christmas or if not, Apple has made the biggest business mistake since new coke and somebodys head is going to show up on the gate at Apple Corporate.
    Gary McCray
    • Re: If they don't do it they are virtually handing a very lucrative market

      Why do you think they’re suing?
      ldo17
  • Apple slavishly copied Nokia!!!!

    any one else noticed how the ipod Nano looks just like a nokia lumia?
    wolfn11
  • Not gonna happen

    It is probably because there WON'T be an iPad mini. Enough about it already! If Apple were to release this, does it make any sense that they would have another event a month after they already had one? That doesn't make any sense to me.
    puffmanxx
  • Why not?

    I don't see why an iPod Touch and iPad Mini couldn't be the same price. As the author of this article states, the cost to manufacture the devices at different sizes doesn't change significantly with screen size. I don't see why Apple wouldn't release both devices at the same price point with nearly identical specs/hardware with the exception of the screen size.

    One could argue that a 4" screen is more desirable because it's more portable (fits in your pocket) while you could make the same argument that a 7" device is more desirable because it's bigger.

    The price of a product has more to do with what people are willing/expecting to pay for a product (perceived value) than it does with making sure there is enough "pricing room" between different product lines.

    Another point is that you can also consider people who will purchase multiple Apple devices. I have an iPhone, so I don't need/want an iPod Touch. A tablet would be nice, but I don't really want something as big (and pricey) as an iPad.
    Joshua Boulton
  • Let Apple be Apple...

    The notion that Apple is driven to invent new products simply to fill holes in their product pricing structure, I think, misses entirely what Apple is about.

    If Apple does a "mini iPad" it will be because they have figured out a fundamentally better kind of device in that size, not because they have squeezed their margins to compete with HTC, Samsung, Acer, Amazon or anyone else building 7" tablets.

    It seems to me very interesting that if one doubled the screen size of the new iPhone to 200 mm diagonal dimension with a 16:9 aspect ratio (2272 x 1280) and had a narrow bezel on the sides, the resulting device is about a big as you can get and still fit the inside pocket of a suit coat, blazer, sport jacket. A cleverly done "phablet" in this size, sold on contract, might be one kind of new device Apple might try. They could get high end iPad pricing, with the carrier subsidizing most of the price so the consumer would get a $200 7.85" tablet + a phone and Apple would see something like $500 each... This looks more like an Apple strategy than does squeezing margins on a shrunken iPad to go Mano-Mano with Amazon.
    z2217
  • iphones cost the same as iPad's

    the top iPhone cost U 400 + the carrier's cost that you pay for over time (with is about 350) so a iPod touch is fully you (up front) as is the ipad.

    But I agree with your point. But everyone say the mini is coming and the WSJ is rarely wrong!
    matt@...
  • Theory...

    Apple is looking for a 5" screen to become the New iPod using the basic designs they just introduced. They know the iPod market is drying up and many iPhone users like larger phones, so a larger iPod would fit the bill for many. It would make a much better game system and console player with Apple TV. Still small enough for a purse or coat pocket, it could even offer a Galaxy note type pen for people who like that. Anyway, iPad mini would sound too much like women's hygiene products again. The other iPods would be called the New Classic with much more storage and portability. So they could make a 32gb only 5" for $299 and a $64" Classic for the same price. The 16gb for $199 and so on.
    jfosterusa