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0 pointssimonh13y ago0 comments

I think it will cannibalise sales of the higher margin iPad, but that ceding the medium form factor market to 7" Android devices would be a bigger long term risk.

In this sense I agree with the analysis that Apple needed to introduce a lower cost medium form factor tablet for strategic reasons. I just expect them to do so in two phases, in exactly the same way that they have with previous devices. That is, introduce the new device at it's premium price point this year, and then move the year old device down to a lower introductory price point the year after.

In other words I agree with the argument that the introductory iPad Mini should be under $300. I just think that next year is when that should happen and jumping the gun would be a panicky amateur move that Apple would be idiots to make.

Long term iPad margins will be lower than they have been up to now, but that's inevitable one way or another and Apple are doing a great job managing the transition.

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ajross13y ago

I should point out that I completely agree -- this is a market Apple needs to play in, the Android boxes are great too and providing huge price pressures, and Apple's margins absolutely will shrink in the future. And all of that is a good thing for all of us.

Nonetheless from the perspective of an Apple shareholder, it's a "bad" thing, and in the short term you'd expect their stock to reflect that.

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