It's finally coming.

We think.

The blogosphere was all aglow on Friday about the likelihood of Apple (NAS: AAPL) finally willing to play small ball with its industry-leading iPad. Sources claim that the world's most valuable tech company will introduce the iPad Mini on Oct. 23, giving it plenty of time to hit the market ahead of the holiday shopping season.


The market's not exactly buzzing with excitement, but give the fine marketing folks at Cupertino some time. Once the details are out, folks will start camping out at a local Apple Store near you.

Then again, what if Apple builds it, and they don't come? As logical as it would seem for Apple to put out a more portable iPad to compete with the glut of seven-inch tablets on the market, it's a battle that Apple may not be able to win.

After all, how do you price these suckers?

The iPad Mini's got a problem
Earlier this year, Apple could've owned this market.

The most popular entry-level tablet was Amazon.com's (NAS: AMZN) Kindle Fire. It fed right into Amazon's vibrant ecosystem of digital books, videos, music, and Android apps, but it wasn't perfect. There was no camera. The display was lacking. There were limitations to the 8 gigabytes of storage.

Then again, at $199 it was hard for buyers to complain.

A smaller iPad would've made a killing then, even at a $299 and possibly even a $349 price point.

It's a whole new ball game now.

That Kindle Fire has been updated a bit and slapped with a $159 price tag. The new Kindle Fire HD adds the camera, beefs up the graphics, and doubles or quadruples the storage starting at the original $199 price point.

Just weeks before Amazon improved and widened its tablet line, Google (NAS: GOOG) decided to show Android makers how it's done by introducing the Nexus 7 for as little as $199.

Are you starting to see why the iPad Mini is shaping up to be a bad bet for Apple? The product makes sense, but there isn't a single price point that makes sense.

It's a quandary for Cupertino
If Apple decides to match that $199 price point that Amazon and Google are succeeding with, it will come at the expense of the $499 iPad. Why would someone pay more than twice as much for the original 9.7-inch iPad when sacrificing a chunk of screen size can save $300?

Of course, Apple isn't going to price the iPad Mini at $199 or even $249. It would have to sacrifice too many features to boost the value proposition of its full-sized tablet. Sure, it could skimp on the camera (the way it did on the original iPad) or lose the Retina Display. It can shave storage capacity. However, then the iPad Mini would be seen as ridiculously inferior to the comparably priced Kindle Fire HD and Google Nexus 7.

Apple has a problem, and it's that it wants to make a profit on its hardware at the same time that Google and Amazon are willing to set all or below cost. They simply want market share, and as a late entry into the small-sized tablet market, Apple has surprisingly plenty to lose.

Oh, and did I mention that this will all be taking place as this month's rollout of Microsoft's (NAS: MSFT) Surface aims squarely at the larger iPad? And if we're eyeing the iPad Mini as a way for parents to hand their young kids a cheaper tablet to play with, can we start having Toys R Us' tabeo tablet in the conversation at $149?

There is no right price for the iPad Mini, and it will be Apple that pays the price for that unanswerable dilemma.

If the iPad Mini is too cheap, the iPad suffers. If the iPad Mini is too expensive, no one will buy it. Skimping on features will make it dead on arrival. Loading too many of the features of its larger sibling will destroy the sibling's appeal.

Are you still excited about the iPad Mini? I'm not -- and I'm a pretty big fan of most things Apple.

Mobile madness
The popularity of e-readers, smartphones, and tablets opens the door for some surprising Wall Street beneficiaries. Read up on three hidden winners in a free report. If you wait for the report to show up on your Nook, you may be too late to the party, so check it out now.

 

The article The Only Reason Why the iPad Mini Won't Matter originally appeared on Fool.com.

Longtime Fool contributor Rick Aristotle Munarriz has no positions in the stocks mentioned above. The Motley Fool owns shares of Apple, Amazon.com, Google, and Microsoft. Motley Fool newsletter services recommend Amazon.com, Apple, and Google. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.

Copyright © 1995 - 2012 The Motley Fool, LLC. All rights reserved. The Motley Fool has a disclosure policy.


Increase your money and finance knowledge from home

Investing Like Warren Buffett

Learn from one of the world's best investors.

View Course »

What is Short Selling?

Make a profit when stocks prices fall.

View Course »

Add a Comment

*0 / 3000 Character Maximum

5 Comments

Filter by:
Michael Chase

You're a moron, don't bet against Apple, you'll lose every time.

October 13 2012 at 10:16 PM Report abuse rate up rate down Reply
Gabriel Kwan Po Leun

As an owner of a nexus 7 and an ipad3, I feel the apple mini will not be able to dominate the market like the original ipad did, or the ipod did, or the iphone did. The author said it best, Apple came in LATE.

And firstnamesteven - you don't know **** about the apple mini either.

October 13 2012 at 9:54 PM Report abuse rate up rate down Reply
First namesteven

Amazing article about a device the author knows NOTHING about. The tech press lives in an echo chamber completely disassociated from consumer reality.

October 13 2012 at 9:32 PM Report abuse rate up rate down Reply
jav1231

I realize people WANT the iPad Mini to fall short but it won't. It will own this market segment. If Apple prices it under $300 you can forget about this failing. It's going to capture the market within months. It doesn't mean the Kindle and Nexus are bad. It's just the effect Apple has on the market right now.

October 13 2012 at 8:07 PM Report abuse rate up rate down Reply
Gary R McCray

A lot of people think Apple can't sell the Mini cheap enough because their own totally over priced IPod Touch is already beyond what they could charge for the Mini.
Another group thinks it has to compete with the hardware features of the existing 7" tablets.
Reality, the Mini will be a whole IPad with all the mature software support and Apps of a regular IPad.
That is why people want the Mini.
And as for price, this is a whole new and huge market and the IPod Touch matters not one whit in it.
Apple can and wants to dominate this market with the Mini and the price for the entry version will either be $250.00 or $300.00.
If the above is not true Tim Cook had better have a second job lined up and I'd sell your Apple stock right now.

October 13 2012 at 7:40 PM Report abuse rate up rate down Reply