Amazon’s Kindle Fire has proved that a tablet can
be relatively small and still sell well. So why can’t Apple create a smaller,
less expensive version of the iPad to compete with a product that is taking
sales? In fact, the Kindle Fire has taken away as many as 1 to 2 million sales
away from the iPad, according to Morgan Keegan analyst Tavis McCourt. Granted, Apple is still selling its iPad in
drones and the iPad has 61.5% market share of all tablet shipments in the
world, slightly down from 63.3% market share in the preceding quarter. Regardless,
a less expensive iPad may help solidify Apple’s dominance at little risk to its
bottom line.
The Wall Street Journal
is reporting that Apple is
testing designs for an 8 inch model of the iPad, which would sport a resolution
similar to the iPad 2. Whether or not such a design comes to fruition will
likely be revealed in early March, when Apple is expecting to announce the iPad
3. According to analysts, diversifying the iPad portfolio would be a wise
strategic move because the tablet market is getting increasingly competitive.
Furthermore, Apple has shown in the past, through its iPod lineup, that
diversification can lead to a decade’s worth of market share dominance.
Steve Jobs, in October of 2010, said that the
current 9.7 inch size of the iPad was the minimum size needed to support tablet
apps. If he were alive today, he’d likely still stand by this statement. At the
same time, the market has shown that people are willing to sacrifice screen
size for a lower price. Although the Kindle Fire may not be taking away too
many sales from the iPad, the Kindle has become a favorite of those who’d like
to read in color due to the portability of the device. By making a competing 8
inch tablet, Apple is opening up itself to another market segment that isn’t
willing to spend $500 on a tablet and isn’t too worried about having a top of
the line device.
Aside from a smaller iPad possibly being unveiled,
Apple is expecting to announce an iPad 3 with a retina display and a quad-core
A6 chip on the first week of March.
