There’s a common narrative, in the tech media, about Apple. It’s partly exaggeration, but partly true.
The narrative is as follows: Apple finds some technology market in desperate need of a polish job, something perhaps on the threshold of being revolutionary but not quite there yet.
Apple puts their design brains to work and magics up a new type of product which, though descended from earlier forms, is strikingly new. The Mac had DNA from earlier PC’s, iPod from earlier MP3 and portable media players, iPad from touchscreen slates and eReaders. Even iTunes was descended from earlier digital music stores.
Whatever market they enter, however, they seem to redefine in a way that sends the competition scrambling for alternatives, giving them a head start of years in many cases.
Yet, there’s one glaring, and recent, entry by Apple that hasn’t had this intended effect: the iPad Mini. Apple was late to the mini tablet game, in what may be remembered as Steve Jobs’ worst market miscalculation ever.
Being late, though, isn’t unusual for Apple. The iPhone was late to the smartphone game. Remember the glory days of the Crackberry?
Apple did not, however, bring their A Game to the mini tablet market. They seemed not to have the heart for it, not to relish their work as they did previous projects. They seemed to do it only because others had, not because they could bring some amazing new experience to the market. Because they didn’t.
But so what? you say. Apple still sold over ten million Minis! you say. To which I say, that may be true, but overall sales of the iPad series are flat. The Mini wasn’t supposed to cannibalize iPad, not completely at least, it was supposed to add a new source of revenue, not eat away at an existing one. It is in that sense that the iPad Mini is a failure, and Apple the ultimate victim of their own success.
Where did the Big Fruit go wrong? Quite simply, they failed to define a new market with, or for, the iPad Mini. It was, at best, a stopgap measure against losing sales, and at worst the ultimate self-induced “Osbourning” of a successful product ever.
Here are some of the components of that failure:
1) It Didn’t Break New Ground
The Mac (technically The Lisa) was the first Graphical User Interface (GUI) PC to ever enjoy wide consumer success. The iPhone was the first touchscreen-centric phone to enjoy wide consumer success. The iPad was the first tablet PC to enjoy wide consumer success.
The iPad Mini entered an already established sector of the tablet market, a market they helped create. Amazon, Asus, and Samsung had already enjoyed success in this area, and while the Tab 7.0 series never became a household name, Kindle and Nexus eventually did, before Apple ever decided that maybe one size doesn’t fit all.
To bring something new to this, Apple at least needed to bring the same level of quality to the Mini as to the 4th Generation iPad launched at the same time.
Instead they essentially recycled the iPad 2 into a slightly smaller space. Their one hollow claim to anything revolutionary (the Lightning Connector does not count, sorry) was to make the screen 7.9″ instead of 7″, which they claim is better, although it actually shows less on the screen than many smaller tablets. Let’s be generous and say this is a split along lines of taste instead of a heaping helping of polish on a turd.
The size issue, though, brings us to the next point:
2) It Was Too Big!
Apple claims that the extra .9″ of screen real estate on the iPad Mini makes for a better user experience, more like using the full iPad than a blown-up smartphone. Let’s not even debate that point, let’s just give them the benefit of the doubt.
That said, how much screen real estate is lost in the 1.8″ between the full iPad and the iPad Mini? A 7″ screen has only 40% of the screen space of a 9.7″ screen. Which means the difference between a Mini and a full iPad is quite a bit less than that.
If Apple had made a 7″ tablet, then they could more easily have marketed the two devices to different types of buyers. Some buyers simply will not make the leap from 9.7″ to 7″, who would make that leap for that extra .9″ of screen.
So instead of converting new buyers, some of whom may simply think 7.9″ too big (for example, too big to easily fit in a purse), they have instead converted customers of the full iPad to the iPad Mini by making the switch as easy as possible, and boasting about it (but more on that later)!
3) It Costs Too Much (or Not Enough)!
The iPad Mini has an entry-level cost of $320, compared with the $200 entry-level cost of a Nexus 7 or Kindle Fire HD. This priced it out of Budget Premium range.
For less than $100 more, you could buy an iPad 2, or a new iPad for less than $200 more. Compare this with a Kindle Fire HD 8.9 for exactly $100 more than a 7″ Fire HD, or the Nexus 10 for exactly $200 more than the Nexus 7.
Amazon and Google’s numbers are crisp, clearly defining them as different price brackets, while Apple’s are fuzzy in this one instance. (Depending on your local currency these numbers may differ, but these are American companies so it makes sense to use dollars as a reference point.)
Worse, Apple stuck to their usual policy of adding $100 to each model whenever memory is doubled, while Google and Amazon added only $50 (still a significant profit). Apple probably did this to remain consistent (lest large iPad owners wonder why they’re paying more), but in so doing failed to differentiate the two products with substantially different price points. Anything but the entry-level Mini costs more than some models of iPad.
Apple didn’t have to target the low-end, but it’s clear they were aiming in that direction with the cost. If they’d gone all-in at a price of $299 or less, they might have made up for lost margins on volume.
Unfortunately, it’s neither one nor the other, not quite a budget tablet, and just shy of premium at the entry-level (definitely premium beyond that).
Instead Apple could have stuck to the high-end, by making a $400 Mini. If they’d made it with similar specs to the 4th Gen iPad, then they would have clearly defined three choices: an older iPad at $400, a newer Mini iPad at the same cost, or a new iPad for $500. Eventually the older iPad might even have been phased out.
4) The Message Was Wrong!
Every inch an iPad.
Really, Apple? Who came up with that bright idea? Because they should really be fired, along with whoever signed off on those commercials juxtaposing the two as if size were the only difference.
The Mini has a smaller profit margin than the full iPad. We know this. So the last thing you want to do is to lead people to believe that your Mini is everything your full iPad is when it, in fact, isn’t (wouldn’t be even if it had newer hardware).
No, on the contrary, you want to accentuate the strengths of each alternative and why a consumer would choose one or the other, always with an eye to steer them towards higher margin items if possible.
You want the hardcore gamer to know that while the Mini can be a sweet gaming rig, it’s worth the extra money to get the quad-core graphics and high resolution of the new iPad. You want the college student to know the Mini is great for textbooks, but the full iPad with a keyboard can be a viable PC replacement.
You don’t want to make the Mini sound bad, naturally, but you want the user to carefully consider which one fits their needs best, including the needs they might have down the line that they haven’t considered yet.
Every inch an iPad does the opposite of this. Put together with the fact of the Mini’s larger (than most mini tablets) screen, and its more attainable (though still high) price point, the consumer may not see any reason to buy the more expensive iPad. Oh, sure, it’s larger, it’s got that gloriously high resolution, but what does that matter? After all, the Mini is every inch an iPad, and it costs less. Apple said so themselves, right?
Can Apple course-correct on this misadventure, this oh-so-costly success, this successful failure? Probably not. They already set the price, it’s likely too late to change that even in a future model. The marketing machine is still in motion. They’ve doubled-down on claiming that extra .9″ makes all the difference between themselves and everyone else! They’ve assured developers little to no work need be done for their iPad apps to run just the same on the Mini.
No, Apple has dug itself a rut. They tried to create a new source of revenue, and instead have begun to drain one of their biggest, little by little. I predict that by next year, the Mini will easily outsell the full iPad, still without substantially adding new sales, and the iPad division will account for substantially less of Apple’s total profits than it did before the Mini.