iPad mini has become a "useless" but still indispensable

On October 19, the US technology website Cnet published an article saying that the sales of iPad mini have been severely affected by the large-screen iPhone 6, but it is still an indispensable member of Apple's product line, and Apple also hopes to use it to promote the sales of the entire iPad.

The main contents of the article are as follows:

Apple typically relies on new generations of products to drive sales, but in the case of the iPad, it relied on the two-year-old, $249 iPad mini to lure consumers into stores and then persuade them to buy a more expensive iPad.

Apple on Thursday unveiled its new tablets : iPad Air 2 and iPad mini 3. But the company also said it will continue to sell the first-generation iPad mini, but at a $50 discount. The 7.9-inch device, launched in late 2012, is now the cheapest tablet in Apple's history, with a 16GB version priced at just $249. The 9.7-inch iPad Air 2, which also has 16GB of storage, starts at $499, while the new iPad mini 3 is priced at $399.

Apple has never been a maker of cheap gadgets. Its devices, from the iPhone to the iMac desktop computer, are all high-end. The company has vowed to continue along that path while focusing on protecting its profitability rather than expanding market share. However, the current slowdown in tablet sales has forced Apple to change its strategy and offer older models at lower prices to expand its iPad's market share.

Apple still may not be a “value” product provider, but it’s getting closer.

"For consumers who want to buy cheap products, Apple can provide some of these products; for consumers who are willing to pay more, they can buy an iMac with Retina display (priced at $2,500)," Apple CEO Tim Cook said in an interview with the media after Thursday's new product launch.

In the past few years, Apple has kept older mobile devices on the market, but at prices about $100 cheaper than newer models. For example, the iPad Air, which was launched a year ago, now starts at $399; the iPhone 5S, which was launched in 2013, now starts at $99, compared to the $199 starting price of this year's iPhone 6.

Apple is still selling the iPad 2, which was released in March 2011, three years later. The first-generation iPad mini is still on sale, and this is the first time Apple is offering five iPad models at once, rather than the four it has offered in the past.

Joining the cheap equipment war

Apple's iPad remains the world's best-selling tablet, but tablet sales overall are not what they used to be. Larger smartphones, including the 4.7-inch iPhone 6 and 5.5-inch iPhone 6 Plus, are eating into tablet demand. Meanwhile, the device's design hasn't changed radically since former Apple CEO Steve Jobs introduced it in 2010.

While consumers may replace their smartphones every two years or less, iPads are used much longer, and consumers like to give old iPads away to family members.

Moreover, in mature markets such as North America, almost every consumer who wants a tablet now has one. Kantar Worldpanel, a market research firm, conducted a survey of 20,000 American consumers and found that only 3% of consumers who do not currently own a tablet intend to buy one in the next 12 months, and another 10% said they might buy one, but as many as 43% said they were not prepared to buy one.

Many consumers who are considering buying a tablet are choosing cheaper options such as Amazon's $200 device or an Android device of the same price.

How does Apple respond? Cut the price of the iPad mini to get more consumers interested in buying it. Obviously, consumers are more likely to buy a tablet if it costs $250 instead of $300 or $500. For this reason, Amazon's Kindle Fire tablet, which originally cost $199, was very popular when it first came on the market. Now, Apple sells the iPad mini for $249, which is enough to attract consumers, but analysts expect that many people will consider paying an extra $50 or $100 to get a better iPad.

"It's all about psychology," said Rhoda Alexander, a tablet analyst at IHS, a market research firm. "They think, 'I'm going to buy this, so why not get something better?'"

We saw this happen last year when Apple introduced the iPhone 5S and iPhone 5C. The iPhone 5S had higher-end hardware and a Touch ID fingerprint sensor, and started at $199. The iPhone 5C had similar hardware to the iPhone 5, but with a more colorful plastic case, and cost $100 less. Unfortunately, Cook admitted in an earnings call in January that iPhone 5C sales were bleak. At the time, he blamed it on people liking the fingerprint sensor and other features that were only available on the iPhone 5S.

Consumers who want better features on their iPads will no doubt pay for a more expensive device. The first-generation iPad mini is the only tablet in Apple's current mobile product line that doesn't have a high-definition Retina display. And if consumers want to use services like Apple Pay, they need to buy the latest iPad Air 2 or iPad mini 3, which are the only ones that support Apple's latest payment technology.

The $249 price tag may also be attractive to consumers in developing markets, but consumers in many developing markets, such as China, don't like buying outdated devices. If they're going to buy a smartphone or tablet, they want the latest.

35 seconds at the press conference

The iPad mini 3 seemed like a footnote at Thursday's event. Phil Schiller, Apple's vice president of global marketing, spent about 35 seconds talking about the device. In terms of features, the iPad mini 3 has no changes compared to the iPad mini 2, except for the addition of a gold version and a TouchID fingerprint sensor.

"After making the performance difference between the iPad mini and the iPad Air last year, Apple has again distanced the two, making the iPad mini the lower-end device," said Jan Dawson, an analyst at JackDaw Research. "I think it's a little unfair that the iPad mini 3 is priced $100 higher than the iPad mini 2."

The iPad mini was a hit with consumers when it was launched, but in the end, the 9.7-inch iPad still dominated iPad sales. According to Kantar Worldpanel data, the iPad mini only accounts for 17% of iPads still in use in the United States. As more consumers buy newer, larger-screen iPhones, this proportion may continue to decline.

"If two mobile devices are similar in size, no one will buy them together," said JP Gownder, an analyst at Forrester Research. "No one will buy an iPhone 6 Plus and then an iPad mini 3."

It's hard to predict how much Apple's tablet business will be affected by its larger iPhone. Apple has long said that if there's a product that's going to eat into its sales, it wants to make it itself. As Cook said during Apple's fourth-quarter 2012 earnings call: "Over the years, we've learned not to be afraid of product rivals. Rather than having someone else make a product like that, we're going to make it ourselves."

But there is evidence from rivals that larger smartphones are eating into the tablet market. Samsung, Apple's biggest rival in mobile devices and the second-largest tablet maker after Apple, said in July that its tablet sales were "sluggish" as users preferred to buy 5- to 6-inch phablets over 7- to 8-inch tablets. Samsung pioneered the phablet category with its Galaxy Note series of smartphones, and now such devices are hot sellers.

It's in this context that Apple is focusing on the 9.7-inch iPad, with only minor upgrades to the iPad mini. If people aren't buying the device, why bother with a major upgrade?

"They realize that the iPad mini will be challenged in the market when people are eager to buy the iPhone 6," said Bob O'Donnell, chief analyst at Technalysis Research. "That's a challenge that any company faces when expanding its product line."

As a winner of Toutiao's Qingyun Plan and Baijiahao's Bai+ Plan, the 2019 Baidu Digital Author of the Year, the Baijiahao's Most Popular Author in the Technology Field, the 2019 Sogou Technology and Culture Author, and the 2021 Baijiahao Quarterly Influential Creator, he has won many awards, including the 2013 Sohu Best Industry Media Person, the 2015 China New Media Entrepreneurship Competition Beijing Third Place, the 2015 Guangmang Experience Award, the 2015 China New Media Entrepreneurship Competition Finals Third Place, and the 2018 Baidu Dynamic Annual Powerful Celebrity.