Apple aims to stay atop tablet mountain

Even priced at $329, the iPad Mini will be a success

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Apple's overall product strategy focuses on delivering a quality user experience through world-class product design and engineering, higher-end components and a tightly integrated ecosystem of product lines, accessories, and apps. The strategy has largely worked well, since delivering a good experience for customers helps ensure enthusiasm and loyalty.

Having said that, it's important to note that many of the inexpensive tablets in the 7- to 8-in. space sell at subsidized prices. The Galaxy Tab and other tablets with mobile carrier support are often subsidized by a carrier in exchange for a two-year contract. Amazon CEO Jeff Bezos recently admitted that his company makes no profit on Kindle devices and sells them at or near cost as a way to drive purchases of electronic content -- ebooks, music, movie and TV shows, and apps (prior to his statements, it was widely assumed that Amazon actually sold the devices at a loss). And Google's primary source of revenue is advertising, so while the company is still perfecting its mobile ad strategy any Android devices are delivering valuable data to the company; making a profit off Android or its own branded Android devices isn't a high priority at the moment.

Apple, on the other hand, makes most of its money from hardware -- Macs, iPads, iPhones, iPods, and the Apple TV. Content is a tool to drive sales of devices more than a revenue stream in its own right. In that context, it isn't really a surprise that the iPad Mini isn't a bargain-basement option.

The question, of course, is whether Apple can show that the iPad Mini is worth $130 more than most of its rivals. I think it can demonstrate enough value to make the iPad Mini successful, but it won't appeal to everyone.

Storage capacity

One point to keep in mind about the iPad Mini is that it generally comes with more on-board storage than competing tablets. Most of the others offer 8GB of storage in their entry-level models. The iPad Mini starts at 16GB, like all of the bigger iPads and current-generation iPhones. That changes the comparison a bit. Given that many tablets are used for media consumption, it's easy to fill up 8GB quickly. When you're comparing many 16GB or 32GB devices to an iPad Mini, the price points are closer. The big exception is Amazon's Kindle Fire HD, which retails for $199 and has 16GB of storage.

If you're looking for a device with a greater amount of storage to begin with, the iPad Mini's price points are easier to accept. That doesn't mean everyone will need or want additional storage and in today's economy many, particularly cash-strapped families planning holiday shopping, may opt for a lower price over capacity.

Contract free

While this issue doesn't apply to all iPad Minis, it's an important consideration for anyone buying a tablet with LTE connectivity. Yes, iPad Mini will mean a larger up-front expense than a subsidized Android tablet like the Galaxy Tab. The flip side is that there's no two-year contract involved. As with buying a subsidized smartphone, most users will end up paying significantly more over the life of the contract than if they had paid full retail up front.

Being contract-free and pre-paid, the iPad Mini also allows greater control over its data plan than subsidized tablets. If you're traveling for work, you can purchase more data as needed. If you're not traveling, you can turn off data completely. You can also monitor and manage data effectively in real-time to avoid any overages completely.

Zero fragmentation

One of the biggest questions preceding the iPad Mini's announcement was how Apple would add support for another screen size in its iOS lineup. After all, screen size has been one of the reasons for the fragmented nature of the Android ecosystem. Apple's solution was both brilliant and incredibly simple: introduce a new physical screen size, but not a new logical screen size. By building a screen that has the same number of pixels as the original iPad and iPad 2, Apple ensures that every iPad app runs just fine on the new device and with greater pixel density for a sharper image, though not as sharp as on a retina display.

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