What is Apple Trying to Do with the iPad Mini?

People are saying the iPad Mini is overpriced and can’t compete with the $200 Kindle, $150 Nook, and $200 Nexus.

They’re right.  It can’t compete with those budget tablets.  But what makes you think it’s supposed to compete with them in the first place?

Right now there are two tablet submarkets – the Premium Market, dominated by the iPad, and a budget market, dominated by those $200 tablets.

If you want to know what Apple is trying to do with the iPad Mini, all you gotta do is look at what they did with their other mobile device that had the name Mini.

AKA the iPod Mini

Back then there was a Premium market for MP3 Players, dominated by the iPod Classic and a budget market, dominated by $30-50 MP3 players.  Apple released the iPod Classic first and captured the Premium market.  Then they released the iPod Mini.  The iPod Mini didn’t compete with the budget market.  Instead its purpose was to grow the overall MP3 player market by creating a midrange market.  And that it did.  Only after the market was maximized into 3 submarkets (Premium, Midrange, Budget) did Apple release their budget solution, the Shuffle.

So Apple’s strategy:

  1. Release a Premium Product, blow up an existing market and capture Premium marketshare
  2. Release a Midrange Product, create a Midrange market where none existed, growing the overall market, and capture Midrange marketshare
  3. Release a Budget Product and go after the Budget market

This iPad Mini is step 2.  Everyone who’s complaining thinks it’s step 3

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