Apple Inc. (AAPL)

[ddkay]

Woohoo! Mac Mini! waited forever for this

[brad]

Woohoo! Mac Mini! waited forever for this

Well, not really "forever." The Mac Mini was last updated in July 2011, just a little over one year ago. The iMac has lingered a bit longer without an update, but the new version is dramatically different from the May 2011 model: much thinner screen, lighter, anti-glare, more powerful, faster, option of fusion drive, etc.; possibly the only downside is that there's no built-in optical drive, but it's simple enough to get the external SuperDrive for that. It looks like a great machine; a lot of people are using iMacs professionally now for graphic design, photography, etc.

[ddkay]

They were both a bit overdue

The hybrid fusion drives are a very cool idea (why didn't anyone think of this before?!). 128GB SSD built onto a 1TB spinning disk. There's still a huge premium on factory installed add-ons, but people will definitely pay, the base prices are super affordable

[andrewf]

Funny, some of the rumours yesterday was for the base model to be priced at $250, which sounded pretty aggressive pricing to me for a device that cost ~$210 to put together.

It seems to me Apple released the iPad mini because there was some traction with 7 inch Android devices. Not sure who the target market is for this, beyond people who would have otherwise bought iPads. It is substantially more expensive than Nexus 7, not to mention the $99 tablet Google is rumoured to be releasing soon.

Good for shareholders that Apple didn't try to compete on price. Accepting low margins on a 7 inch device that will cannibalize a large % of sales from various 10 inch iPads was not a good plan.

[andrewf]

They were both a bit overdue

The hybrid fusion drives are a very cool idea (why didn't anyone think of this before?!). 128GB SSD built onto a 1TB spinning disk. There's still a huge premium on factory installed add-ons, but people will definitely pay, the base prices are super affordable

These have been around for ages. My 5 year old dell had one (admittedly, not with 128 gb of solid state memory, but enough to run a lite media player OS).

[AnimeEd]

They were both a bit overdue

The hybrid fusion drives are a very cool idea (why didn't anyone think of this before?!). 128GB SSD built onto a 1TB spinning disk. There's still a huge premium on factory installed add-ons, but people will definitely pay, the base prices are super affordable

Seagate has been pushing that forever. I'm pretty sure that is what Apple is using, there are not many players in the HD market.

http://www.seagate.com/internal-hard...tus-xt-hybrid/

[thenegotiator]

GOB has left the building... he has decided not to take further part in this thread, but has invited PMs from those who want to contact him

GOB
do not leave the building man.
If AAPl beats the estimates on thursday it will just fly man.
i consider a consolidation on the price.
come back man.
cheers.

[ddkay]

LOL!! I've been on Intel SSDs since 2008 and haven't purchased a mechanical drives since so I didn't even know this was a thing!

[Dibs]

Funny, some of the rumours yesterday was for the base model to be priced at $250, which sounded pretty aggressive pricing to me for a device that cost ~$210 to put together.

It seems to me Apple released the iPad mini because there was some traction with 7 inch Android devices. Not sure who the target market is for this, beyond people who would have otherwise bought iPads. It is substantially more expensive than Nexus 7, not to mention the $99 tablet Google is rumoured to be releasing soon.

Good for shareholders that Apple didn't try to compete on price. Accepting low margins on a 7 inch device that will cannibalize a large % of sales from various 10 inch iPads was not a good plan.

Many people seem to think it is unreasonable to sell the iPad mini starting at $329 but I think they priced it just right. First, as you said, this product will cannibalize iPad sales and Apple couldn't accept a lower profit margin on the iPad mini. Second, the iPod Touch is selling for $299. I know that the market for the iPod Touch is small compared to tablets, but there was no way Apple could sell their iPad mini for less than than the iPod Touch.

The target market for the iPad mini does go beyond those who would have otherwise bought an iPad. There are those who have not bought an iPad because of the price, now they have something cheaper to consider. Apple will likely capture more of that market. For example, I can see parents who are glad to have a cheaper iPad that they can buy for their kids.

While their competitors have to get by on razorthin margins, Apple puts a premium to their products and end up selling more.

Apple's marketing chief Phil Schiller says it best, as quoted by Reuters:

"The iPad is far and away the most successful product in its category. The most affordable product we've made so far was $399 and people were choosing that over those devices," Schiller said.

"And now you can get a device that's even more affordable at $329 in this great new form, and I think a lot of customers are going to be very excited about that," Schiller said.

[andrewf]

^Yes, it makes Apple more accessible for people who want to buy into the brand and the platform, not necessarily someone who is looking for a tablet. These people probably would not buy any other tablet because they're not really shopping for tablets, they're shopping for Apple (which is about brand, not device).

On the other hand, this is a trade-off. The $ margin on an iPad mini is lower than for other iPads. There has to be enough net unit growth to make up for the cannibalization at a higher $ margin/unit. I think there probably will be, but I see this device as competing with iPad 2 or 3 more than Nexus 7. Nexus 7 will dominate among those who want an inexpensive, good quality tablet experience and aren't too hung up on brand or the Apple platform (does it let me watch youtube, let me read email or ebooks, browse the web, play games, etc.).