|Apple is likely to take on the Nexus 7 tablet challenge from Google head-on with a smaller and cheaper version of its market-dominating iPad tablet, sources told The New York Times this weekend following similar reports from Bloomberg and The Wall Street Journal. The so-called "iPad mini," which could end up not being branded with the "iPad" name, would feature a 7.85-inch screen (larger than most competing devices) and would likely be near Google's $200 pricetag for the Nexus 7.
The Nexus 7 is seen more as a competitor to the Kindle Fire than to the existing iPad, but has demonstrated that a smaller device can be popular if it is priced at rock-bottom levels. The Times reports that its sources believe Apple's smaller tablet will be launched sometime this year, most likely ahead of the holiday buying season. Some rumors have suggested that Apple could make an announcement on the product as early as next month.
A former Apple engineer who worked on the original iPad product in the mid-2000s pointed out in the article that early prototypes of the iPad had been produced with a 7-inch screen, but that the size had been rejected as "too small" by then-CEO Steve Jobs, who said it would only be good for surfing "in the bathroom." The later 9.7-inch size that was released was deemed by Jobs to have sufficient screen size to allow "great tablet apps," saying that smaller screens compromised too much. "There are clear limits of how close you can physically place elements on a touch screen before users cannot reliably tap, flick or pinch them," he told analysts at the time, and memorably said that 7-inch tablets would need to come with sandpaper so that users "could whittle their fingertips down" to finer points.
Jobs' rationale at the time, however, may not have reflected the development of significantly higher-resolution display technology that has emerged in recent years. Should the new device have what Apple refers to as a "Retina" quality display, the reduced size may be able to compensate for some of the accuracy Jobs said smaller screens lacked. Even the alleged "iPad mini" will have a significantly larger screen than either the current Kindle Fire (a 7.0-inch screen with a resolution of 600x1024) or Nexus 7 (a higher-quality IPS 7-inch display with a resolution of 1280x800).
Jobs' foresight on smaller screens has largely been borne out in the marketplace: while some 7-inch tablets have briefly flirted with success (most notably the Fire), none have made a significant dent in Apple's marketshare. Even among rival tablets, the 9.7-and-larger screen sizes (such as most recently demonstrated with the reveal of the Microsoft Surface) have generated the most interest.
A smaller device with a Retina-quality display could prove to be a superior experience to either the Kindle Fire or the Nexus 7 for media consumption, e-book reading, casual gaming and other general uses, and may not even be marketed as an iPad at all -- but as a next-generation iPod Touch, the paper quotes analyst Horace Dediu as saying. A significantly lower price (which would have to be in the range of $200-300 in order to avoid cannibalizing iPad 2 sales), the attraction of the iOS system and App Store, along with a superior screen or other advantages would likely undercut efforts by Google, Samsung, Amazon and others to make the 7-inch tablet form factor a workable low-end budget alternative.
The biggest questions surrounding the introduction of a smaller device would be how the company plans on making it profitable, along with the problem of effectively rebuffing Jobs' prior contentions. The latter is probably an easy obstacle to overcome; technologies have improved significantly since the days of the original iPad, and Jobs himself said before his death last year that Apple should not be beholden to how he might do things. The possibility of the device being sold as a larger iPod Touch rather than a smaller iPad may skirt around the issue by positioning it more closely to the "pure media-consumption device" early critics of the original iPad mistakenly claimed it was.
Apple could also say that it is simply acquiescing to customer demand, particularly with women (who have tended to drive, for example, sales of the non-Fire and smaller Kindle models), demonstrating a willingness to break with its co-founder when the market demands -- an idea that would surprise its rivals. The NYT store quotes a female former engineer at Apple, Leslie Grandy, as noting that the smaller (and presumably lighter) design would fit easily into purses and small "messenger" type bags increasingly worn by cyclists and commuters.
The former issue presents more of a problem: Apple does not always have market dominance (for example, in computers as well as smartphones) but it nearly always has the most profitable products on the market. The iPhone, though just edged out of dominance by the combination of all makes of Android-based phones, is still the most popular and most profitable single brand on the market by far.
Apple's other products, from notebooks to tablets, are also generally the most profitable models in every category. Google has already admitted it does not make a profit (and in fact may be losing money) on the Nexus 7, and the Kindle Fire also costs Amazon money with every unit sold.
While an 8-inch iPad might be somewhat cheaper to make than a 10-inch one, how the company will manage profitability on the smaller model may rely -- for the first time -- on its incorporated iTunes Stores and related services, lending strength to the idea that the "mini iPad" might actually be a "maxi-iPod" after all. Other details, such as whether the device would have cellular data capability, cameras or a mic remain to be seen. At the very least, if the latest reports are accurate, the accessory market is about to get another huge boost for Christmas this year. [via The New York Times, graphic via TrojanKitten]