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iPad mini could further dent PC sales

With the imminent debut of the iPad mini, a report by Cnet now quotes an analyst who claims that the upcoming tablet could add a further blow to the PC market.

Aaron Pereira|Oct 23, 2012, 10:10:52 IST

There has been a slump in the PC market for the past few months. Last month, Intel Corp cut its third-quarter revenue estimate more than expected due to a decline in the demand for its chips. Customers have reduced inventories, and businesses are buying fewer personal computers. With the imminent debut of the iPad mini, a report by Cnet now quotes an analyst who claims that the upcoming tablet could add a further blow to the PC market.

Cnet spoke with JP Morgan analyst Mark Moskowitz, and he stated that the upcoming 7.85-inch tablet could possibly steal more sales from the PC market that is already in the midst of a slump. In an investors note, Moskowitz stated, “In our view, the iPad Mini stands to target price-sensitive users and the e-reader crowd. Given the global economic uncertainty, we think price-sensitive users could gravitate toward an iPad Mini instead of making a PC purchase.” Cover

The iPad mini poised to take over

The report went on to add that the analyst stated that in these difficult economic times, consumers choose to buy feel-good products and this gives a boost to the iPad mini over other tablets or PCs. The report goes on to add, “Further, consumers are expected to refresh their smartphones and tablets two or three times before they buy a new computer, which means the life of your average PC could drag out from four or five years to six or seven years, Moskowitz noted.”

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The question persists: How much are consumers willing to shell out for these feel good products. As per a recent report by Mark Gurman of 9to5Mac who has a noteworthy track record of forecasting the pricing of Apple products. He states that the base model of the iPad mini will cost roughly $329. However, this could indicate that Apple has shelved plans of launching an 8GB model with a sub $200 price range and may possibly launch the base model with 16GB of storage.

As per the report the author states, “Two higher capacities of the smaller iPad will be available in the WiFi-only configuration. These will likely be priced at $100 premiums over each other at a minimum of $429 and $529. Apple’s smaller iPad will also come in a version that connects to cellular networks. Like the third-generation iPad, these models will come at a $130 premium over their corresponding storage capacity in the Wi-Fi-only line. This comes out to likely minimum price points of $459, $559, and $659 for the Wi-Fi + Cellular line.”

This price point is significantly higher than the base model of the Google Nexus 7, which is priced at $199 as well as the entry-level Amazon Kindle Fire which $159. To this, the report ends by stating, “However, with 250,000 iPad-optimized apps, large iTunes Music, TV Show, Podcast, and Movie collections, digital book reading and purchasing through iBooks, and Apple’s large, integrated ecosystem of other products and accessories, the premium will likely be worth the money for a lot of people this holiday season”.