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Apple to go Retina on iPad Mini

'Inevitable,' says analyst in the face of conflicting reports, especially after Google delivered a high-resolution Nexus 7 for $249

August 1, 2013 02:17 PM ET

Computerworld - Apple will launch a high-resolution, Retina-equipped iPad Mini this fall or in early 2014. Or it won't.

Citing "people familiar with the matter," the Wall Street Journal (subscription required) today claimed that Apple suppliers will start production in the fourth quarter of a new iPad Mini featuring a high-resolution display, dubbed "Retina" by Apple.

But other reports, including one Wednesday by 9to5Mac.com, said just the opposite: Apple will instead deliver another iPad Mini with a lower-resolution screen.

Both could be right: Apple may crank out two new iPad Mini tablets. But one analyst doesn't think so.

"An iPad Mini with Retina is not only logical but inevitable," said Ezra Gottheil, an analyst with Technology Business Research, placing all his money on a Retina Mini.

A higher-resolution 7.9-in. tablet will be especially important to Apple after Google's launch of a new Nexus 7 tablet with a 1920-x-1200-pixel screen. The screen boasts a per-inch pixel density twice that of the current iPad Mini's.

But while some pundits have predicted that Apple will release a Retina iPad Mini at a higher price alongside a new reduced-price version with the same 1024-x-768-pixel display as the current device -- for two new models -- Gottheil countered with history.

"Apple will do what it has done in the past, in other words bring down the price of the older models to expand the available market when it comes out with a Retina iPad Mini," said Gottheil.

That has been Apple practice: It has used the strategy with its iPhone and full-sized iPad lines by continuing to offer older models at reduced prices. The 2011 iPad 2, for example, continues to sell for $399, $100 less than the Retina-equipped fourth-generation iPad of last fall.

Gottheil had no inside information on Apple's plans or possible pricing, but reiterated in an interview today that $249 for last year's iPad Mini would be a "killer price."

"I'd argue that expanding the market [with a lower-priced iPad Mini] is even more important than having a higher-resolution tablet at that size," Gottheil said. "The slow-down in Apple's tablet sales stems from the start of a market saturation for premium-priced products, so a lower-priced [iPad Mini] is critical to maintaining growth. The question is how far they can bring down the price."

Apple will most likely price a new Retina iPad Mini at the same $329 it charges for the 2012 tablet. "That's also Apple's classic strategy, to find a way to justify maintaining the current price," Gottheil said.

Gottheil rejected the idea that Apple would increase the price of a Retina Mini. It would make better sense -- both as a business decision and as consistent with past moves -- for Apple to drop the price than to raise it. "$329 has always seemed an awkward price," he said. "If they could somehow reduce [a Retina iPad Mini] to a number that starts with '2,' like $299, it would make for a nice pairing with a $249 older Mini. I wouldn't rule that out."

Whatever Apple does will significantly affect its bottom line, as smaller tablets are expected to comprise the majority of sales not only this year, but capture ever-larger shares in the near future.

Earlier this week, NPD DisplaySearch updated its tablet forecast, saying that devices with screens smaller than 8-in. will account for 59% of the market this year and climb to 63% of all sales in 2015.

"Smaller tablets are important, because they will encourage adoption in emerging regions," said DisplaySearch analyst Richard Shim in a statement. "Smaller screen sizes translate to lower-priced options, since display panels tend to comprise just over a third of the total cost of a tablet, which makes them attractive in price-sensitive markets."

This article, Apple to go Retina on iPad Mini, was originally published at Computerworld.com.

covers Microsoft, security issues, Apple, Web browsers and general technology breaking news for Computerworld. Follow Gregg on Twitter at Twitter @gkeizer, on Google+ or subscribe to Gregg's RSS feed Keizer RSS. His email address is gkeizer@computerworld.com.

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