© grzegorz kula Business | October 29, 2012

iPad mini with this year’s sales volume of 6 million units

The highly anticipated 7.9” iPad mini is officially launched! With the weight of only 308 grams and thickness of 7.2 mm, it sets a new benchmark for the mobility of tablets.
The narrow bezel gives the tablet a stylish industrial design, which is expected to be an important factor for other brands to develop the new generation of tablets. iPad mini’s price of $329 is not as shockingly destructive as expected in a fierce market crowed with low-priced tablets priced at $200. It is very possible that high level of costs and limited supply this year force Apple to take a relatively conservative pricing strategy, indicates WitsView, the panel research division of TrendForce.

WitsView research director Eric Chiou says that, although the panel in 7.9” iPad mini doesn’t carry Retina display that Apple has emphasized, the narrow bezel is still a huge breakthrough for the mass-production of medium-sized panels. Compared to rivals’ FFS panels featuring WXGA (1280x800) resolution in 7” tablets, its price is at least 20% higher.

On the other hand, to minimize the weight and thickness at the same time, iPad mini quits using G/G structure, whose cost competitiveness reaching peak with the three-year tradition in the iPad family, and adopts the new generation of GF2 structure. The key DITO Film Sensor in the GF2 touch module still has its bottleneck on mass-production, seeing a high level of price due to a few supplies controlled by Japanese makers for the moment.

In terms of the price of entire touch module, GF2 in iPad mini is at least 40%-50% higher than opponents’ 7” OGS or G/G structures. The specification requirements lift iPad mini costs, which may be the major reason why Apple is unable to fully perform on prices.

Secondly, as the schedule of panel mass-production is delayed, WitsView revises down this year’s shipment target to 6 million units from 8.5 million units. From the view of attacking market share, the price tag of $329 may be slightly conservative, but in the condition of limited supply, the pricing strategy would firstly satisfy consumers with strong purchase intention and show clear profit-maintaining effect by avoiding entering the cut-throat price competition at the early stage of sales.

Chiou further indicates that, three members New iPad, iPad 2, and iPad mini exist simultaneously in the iPad family, seeming to show the enriched variety of product lines, but the unobvious price gaps would bring the scene of competing against each other in the peak sales season this year. The promotion of high resolution tablets (QXGA and WUXGA) doesn’t run smoothly, contrarily consumers fall for affordable products that emerge, forcing Apple to extend iPad2’s lifecycle and put the price at $399.

From the rational analysis of size-price ratio, iPad 2 is still very appealing to first-time buyers of tablets and consumers with budget awareness. The rising issues are negative effect to the upper New iPad with a higher price by only $100 and consumers’ decision depending on key issues, including display area, mobility and prices, when comparing iPad mini with a lower price by merely $70, inevitablely leading to a situation of taking clients from each other.

WitsView maintains its estimate of 64 million units in the overall shipment for iPad family this year, among these, 9.7” accounts for 90%, mainly responsible for the blooming or waning of iPad sales. On the other hand, as iPad mini’s price of $329 is not crushing enough to Android’s 7” tablets at $199, Amazon and Google Nexus are expected to stay at a relatively advantageous position in the low-priced tablet sales season of year end, respectively challenging the sales volumes of 7.4 million and 4 million units.
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