There's little doubt that a new iPhone is incoming, although we won't know when we'll see it for sure until Apple starts sending out press invites and won't know for sure what new features it will have until we see it in Tim Cook's hand. There are strong claims that suggest the iPhone 5 will feature a 4-inch screen, have a metal backed chassis, feature a shrunken 19-pin dock connector, include NFC technology, and possibly be made of a super-tough amorphous alloy called LiquidMetal.
The iPad Mini rumors are far more speculative. There have been no alleged component leaks and nothing to go on beyond rumor and tech gossip. The justification for the iPad Mini seems to revolve around the success of 7-inch tablets such as Amazon's Kindle Fire and Google's Nexus 7. Amazon and Google both have a 7-inch tablet, so Apple needs one too.
The problem with the iPad Mini is that while it is technically possible for Apple to design and build a 7-inch tablet, the problem is pricing the device. It has to be competitive in the face of the Kindle Fire and Nexus 7, but not priced so low as to cannibalizes sales of the higher-priced -- and higher profit margin -- full-sized iPad.
Last week, engineer Ryan Jones published a note relating to the supposed iPad mini and highlighted how Apple has created market disruption by selling cheaper iPhones and iPods. Jones points out how Apple has used a combination of three strategies to bring cheaper products to market. These are:
- Create a new product line;
- Keep selling old hardware;
- Get someone else to subsidize the product.
He also posted an interesting graphic showing every current model of iPhone, iPod, and iPad graphed by price. It's an interesting graphic that clearly shows the price point that Apple would need to hit for any smaller iPad.
That graphic raises an interesting question. Do buyers want a smaller iPad -- that is, a device with a smaller footprint or form factor -- or are they looking for a cheaper iPad?
If the market wants a smaller iPad then Apple is going to have to get its thinking cap on and come up with a whole new class of device, and price it to fit into the blank space in the chart above. But if Apple wants to sell a cheaper iPad then the solution for this could be in the form of subsidized iPads.
In my opinion, the case for the iPad Mini hasn't been made.