To the surprise of some analysts, who were expecting the iPad mini to retail from around $250, Apple slapped a $329 (£269) price tag on the basic version (Wi-Fi only, 16GB storage). Google’s Nexus 7 and Amazon’s Kindle Fire can be snapped up for under £200. After the launch, Apple’s share price dipped 3 per cent to $613 over fears that the higher price may stifle demand. The top-of-the-range iPad mini, packed with 64GB storage and supporting mobile broadband, retails for a hefty £529.
Even so, Apple has a range of apps and content to woo customers with, which might justify the price premium. The brand, too, still looks bullet-proof on the high street. A mess-up with Apple maps on iPhone 5 did not stop it breaking pre-order records. Moreover, 100m iPads have been sold worldwide since the device was launched in 2010. According to HIS iSuppli, a market research firm, Apple’s iPad mini will help push sales in the mid-sized tablet market from 34m units this year to 67m units in 2013.
Tablet competition will intensify further when Microsoft unveils its Surface device, using Windows 8, on 26 October. Available initially in eight countries, including the UK, a ‘lite’ Windows RT version of Surface - using ARM-designed chips - carries a price tag of £399. Three days later, on 29th October, Google is expected to unveil a 10-inch Nexus tablet.
We have backed Apple since our buy tip ($376 6 October 2011). True, the share price has fallen back in recent times and investor reaction to the iPad mini was muted, but we would be wary of writing Apple off just yet.