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Did Apple gloss over the iPad mini 3 to keep focus on the iPhone 6 Plus?

Did Apple gloss over the iPad mini 3 to keep focus on the iPhone 6 Plus?
Let's start out with some basic facts that have to be established before we dive too deeply into what is happening with Apple right now. First of all, the iPad announcement last Thursday was extremely boring. Throughout the entire event, there were three interesting points - the cool laser cutting the pencil intro for the iPad Air 2, Stephen Colbert's bit, and the iMac Retina. That's it. The overall tone was more light-hearted and fun; but overall, it felt like there wasn't a huge reason for Apple to have the event. Even worse, all of those "high points" have serious caveats attached to them. Stephen Colbert's bit was funny, but didn't really add anything to Apple's overall message or product announcements. And, while the iMac Retina's display and price tag are phenomenal, the market for $2500 desktops is getting smaller by the day, as users opt for laptops and mobile devices instead of desktops.

The industrial design of the iPad Air 2 is breathtaking. Apple continues to be one of, if not the best hardware maker in the business, and being able to make the already impressive iPad Air thinner and lighter is truly a remarkable feat. That said, it is a feat that doesn't really mean anything. If you were to go out and poll actual consumers, the vast majority would probably have rather had Apple use those space savings for a bigger battery, instead of a smaller case (a similar sentiment is attached to the new iPhone 6 and 6 Plus). Unfortunately, Apple has device dysmorphic disorder, and sees the best way to improve as getting thinner and lighter, while ignoring the drawbacks of those decisions. 

The missing iPad mini update


But, the part of the whole long mess that really interests me the most is the complete lack of attention paid to the iPad mini 3. In the lead-up to the event, the rumor mill was assuming that Apple wasn't even going to bother announcing a new iPad mini, and in many ways, those rumors came true. Apple didn't really announce a new iPad mini, but rather announced an iPad mini Retina with TouchID. The only differences between the iPad mini 2 and mini 3 are: 1) TouchID, 2) the new gold color option, and 3) a $100 premium for the mini 3. 

Of course, the fact that the iPad mini 3 was barely an upgrade wasn't even the biggest problem with the announcement. The biggest issue was that Apple left both the iPad mini and mini 2 in their product lineup alongside the mini 3. So, customers can either choose a $249 iPad mini or $399 iPad mini 3, but both are made to look like terrible deals, because you can also still get an iPad mini 2 for $299. The mini 2 for just $50 more than the original mini is an absolute steal; and, the mini 2 for $100 less than the mini 3 is also a steal, considering the only difference on the spec sheet is TouchID. The lineup makes almost no sense. It would have made far more sense if the mini 3 simply replaced the mini 2, and the original mini was kept in the lineup for $299 (similar to the way Apple moved from the iPad 3 to the iPad 4); or, a worse suggestion (but still better than what Apple actually did) would have been to price the original mini at $249 or $299, put the iPad mini 2 at $349, and the mini 3 at $399. A $50 premium for TouchID makes far more sense. 

Did Apple gloss over the iPad mini 3 to keep focus on the iPhone 6 Plus?

The most reasonable explanation for the strange rollout of the iPad mini 3 is that this is a temporary solution. There are theories that the iPad mini 2 will be removed from the lineup completely in a month or two, and leave just the OG mini and the mini 3 as the options for smaller Apple tablets. There are a couple odd points with this theory though. First of all, it would mean Apple keeping the original iPad mini around, but it would make more sense for Apple to want to get rid of any non-Retina display devices as soon as it can. The other issue is that this idea tends to assume that Apple has extra mini 2 stock to get rid of, but Tim Cook is a supply chain genius, and having extra stock of anything feels out of character. One story about Cook's rise in the ranks of Apple talks about how in his first two years in the company, he was able to reduce inventory on hand levels from 2 months to just 6 days. With that kind of turnover, it's impossible to believe that there was extra stock that factored into the decision. 

There is obviously also the cynical/conspiracy theory of it all that maybe Apple thought no one would notice that there is almost no difference between the iPad mini 2 and mini 3, and wants to pull in higher profit margins. I'd say that there is a pretty big issue with that idea as well; because, in order to believe that Apple execs can honestly think that little of its customer base, you would also have to believe that Apple is completely blind to media coverage. And, there is no logical way that anyone could believe that. Apple has one of the best public relations/marketing teams in the world because it understands the media and how to play the game far better than most. There is no way a company so committed to marketing would be that naive as to how this product would be received. 

Shifting sales


There is another possibility though - maybe Apple wants to cannibalize its own sales. When Apple first released the iPad mini, it cannibalized full size iPad sales. Fairly soon after the mini was first released, it made up 60% of Apple's tablet sales, which led to more tablet sales overall, but a drop in profit margins. Apple loves its profit margins, so maybe it wants to tilt those scales back a bit. 

As we learned this week from Apple's quarterly earnings report, iPad sales are dropping. Where the iPhone saw a 16% rise in sales year-on-year, but iPad sales dropped by 12.8% year-on-year. Tablet sales across the ecosystem are on the decline, but phablet sales around the world are on the rise. And, if you didn't notice, a $749 iPhone 6 Plus is quite a bit more profitable than even a $399 iPad mini. Also, to a lesser extent, someone who would buy one of those two devices isn't as likely to buy both. In general, someone who buys a phablet, doesn't also go for a smaller tablet. 

But, when it comes to Apple, profit margins are king. Apple doesn't have something like Google's ad sales to subsidize other projects. Apple has to make money on the hardware it sells in order to keep making its shareholders happy. iPhone 6 Plus sales might not compare to iPad mini sales at first, but Apple is obviously going to push hard with the 6 Plus. 

Did Apple gloss over the iPad mini 3 to keep focus on the iPhone 6 Plus?

Apple has already noted that demand for new iPhones is "not on the same planet" as supply. The implication with that statement was more skewed towards the 6 Plus, which is on backorder up to one month. Of course, what we're supposed to assume is that the reason why supply and demand are so far apart is because of the demand side, although the more reasonable explanation is that Apple simply isn't producing enough supply. The iPhone 6 Plus is a new device for Apple, and it is very likely that Apple is under-producing the device as it sorts out what the demand actually is. Doing that means no wasted inventory, and it gives the impression that the device is more popular than it might be. 

There's a reason why Apple and Samsung are hard to unseat in the mobile space: they are the best at marketing, and making their devices popular. And, people like popular devices. Apple obviously wants to make the iPhone 6 Plus a success, and it wants the 6 Plus in the spotlight. That spotlight also gets to cover the iPhone 6 and the iPad Air 2, but the iPad mini is getting left out. Apple could have made better decisions to make the mini 3 a more attractive upgrade. At the very least, it could have put the A8 processor in it, rather than the A7. That still gives the premium to the iPad Air 2 with the A8X, while giving a bit to the mini. But, that's not what Apple chose to do. Apple chose to leave the mini out a bit, and focus on its more profitable devices. 

Conclusion


This is a very interesting time for Apple. It has a lot of new devices to deal with. The iPhone 6 is a massive change, the iPhone 6 Plus is a whole new segment, the Apple Watch is in the works, and there are still rumors of a larger iPad Pro. When it comes to hardware sales, all of those devices have solid profit margins attached. The only device in the mix that doesn't is the iPad mini, which has tended to make up for the smaller profit margins with more sales. But, tablet sales are on the decline, so Apple seems to be refocusing back on the smartphone world and the iPhone 6 Plus. 

19 Comments
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posted on 23 Oct 2014, 22:18

1. Mrmark (Posts: 303; Member since: 26 Jan 2013)


The answer is NO!

posted on 23 Oct 2014, 22:19 3

2. Jinto (Posts: 436; Member since: 15 Jan 2014)


Apple doesn't care about the mini tablet section anymore

posted on 23 Oct 2014, 23:28 1

9. Mxyzptlk (unregistered)


Right Apple doesn't care about one of their hottest sellers

posted on 24 Oct 2014, 04:12 5

13. shuaibhere (Posts: 1986; Member since: 07 Jul 2012)


Apple doesn't care about the device which gives them least profit...
Apple is all about profit...

posted on 24 Oct 2014, 05:39 4

16. Chunkyspudface (Posts: 65; Member since: 31 May 2013)


If thy DID care, then they would add more than a year-old iPhone feature. Touch ID is a good feature, but doesn't justify a new model, and certainly doesn't show they 'care'.

posted on 24 Oct 2014, 04:12

14. alumoyo (Posts: 369; Member since: 26 Aug 2013)


Neither do the customers - its a global trend. NEITHER DOES GOOGLE - that's why there was no new Nexus 7 model this year.

posted on 23 Oct 2014, 22:27 1

3. Sakeem (Posts: 611; Member since: 05 Sep 2012)


I think it is the higher profit margin and pushing people towards the full sized slate. I found this part funny though; "There is obviously also the cynical/conspiracy theory of it all that maybe Apple thought no one would notice that there is almost no difference between the iPad mini 2 and mini 3, and wants to pull in higher profit margins. I'd say that there is a pretty big issue with that idea as well; because, in order to believe that Apple execs can honestly think that little of its customer base, you would also have to believe that Apple is completely blind to media coverage. And, there is no logical way that anyone could believe that. Apple has one of the best public relations/marketing teams in the world because it understands the media and how to play the game far better than most. There is no way a company so committed to marketing would be that naive as to how this product would be received." They certainly do know how to play the game with the media as you barely see any negative unbiased reviews concerning their products. They are allowed to get away with things most companies dream about. Incremental upgrades being one of them. The 6+ has some issues right now, but it will all be forgotten by the holiday rush b/c the media will sweep it all under the rug. Maybe for fear of being blackballed by Apple. Who knows.

posted on 23 Oct 2014, 22:28 5

4. fzacek (Posts: 2486; Member since: 26 Jan 2014)


Apple is greedy for $$$...

posted on 23 Oct 2014, 23:28 2

8. Mxyzptlk (unregistered)


You're greedy for attention

posted on 23 Oct 2014, 23:46 8

10. fzacek (Posts: 2486; Member since: 26 Jan 2014)


So are you...

posted on 24 Oct 2014, 04:46

15. roldefol (Posts: 4365; Member since: 28 Jan 2011)


What company isn't? You think there's some scrappy tech company only in it for the customers? Apple is just the best at getting away with it (see:$100 storage premiums).

posted on 24 Oct 2014, 05:51

17. darkkjedii (Posts: 24915; Member since: 05 Feb 2011)


Name one for profit company that isn't. Mxy is right, you post strictly for green thumbs, never any tech knowledge in what you post. Go play with your fat pink cat.

posted on 24 Oct 2014, 13:06

18. Iodine (Posts: 1395; Member since: 19 Jun 2014)


They are greedy because they are the only company that makes huge profits from mobile industry ?

posted on 23 Oct 2014, 22:42 3

5. TimCook (banned) (Posts: 450; Member since: 23 Oct 2014)


I thought the IPad Air 2 was a minor upgrade until I saw the CPU and GPU benchmarks of the device, I must admit I am really impressed now with the Air 2.
I think the mini 3 is not worth the trouble.

Even though IOS devices never had any performance issues I have recently noticed some really power demanding apps popping up in the App Store, Especially games.

I believe Apple is really busy with the IPhone breaking all records this year but the recent agreement they had with IBM, plus the Metal gaming technology they introduced, together with the extra power they are bringing on the Ipad makes me believe that Apple next year will bring a Pro Model that will rival the Surface 3 and basically change the tablet game once more.

posted on 23 Oct 2014, 23:15 3

7. iushnt (Posts: 2259; Member since: 06 Feb 2013)


U r right, but its not just Apple but everyone would be into the surface 4 level..but the surface might be much more powerfu by then

posted on 24 Oct 2014, 20:53

19. Napalm_3nema (Posts: 2236; Member since: 14 Jun 2013)


The Air 2 is nothing short of fantastic. I love mine.

posted on 23 Oct 2014, 23:03 3

6. HugoBarraCyanogenmod (Posts: 1357; Member since: 06 Jul 2014)


Dumbest article ever, iPhone 6+ sell because ifans hungry to get phablets for a decade. IPad mini 3 with cellular cost must less than iPhone 6+, some people will still choose iPad mini because of this, not to mention better battery life on iPad mini

posted on 24 Oct 2014, 01:33 3

11. Iodine (Posts: 1395; Member since: 19 Jun 2014)


Better said android swithers were hungry to get iPhone 6 Plus for a decade.

posted on 24 Oct 2014, 01:54 1

12. Iodine (Posts: 1395; Member since: 19 Jun 2014)


I think that Apple neded to roll out an important feature (Touch ID) but the complete upgrade wasn't ready.

Apple is working on enormous scale, getting an 7,9" LTPS display with a Retina quality in millions was probably too hard to get this year. Yes you have an LTPS iPhone 6 and 6+ but they are far smaller and you could choose to make a million of iPad minis or 2,3 millions iPhone 6 Pluses, resp. 3 millions iPhone 6 units, not even mentioning that you are far more likely to get an manufacteuring defect on a larger screen, and they get rejected. So I think It's a clear choose for Apple.

iPad mini 3 is probably just an semi-jump and Apple didn't upgrade it much because they don't want you to buy it as there could be an 6,1 mm, under 300 g iPad mini with an LTPS full sRGB retina display (and some anti reflective coating as well !) and A8X in 6 months or so... You know like iPad 3 and 4.

While I think that Apple had decided to prefer manufacteuring iPhone 6 instead of next gen mini I don't think they want you to swith from an mini to an 6+.
Comparing screen area going from an iPhone 6+ to an iPad mini is a bigger jump than going from an 3,5" iPhone to the iPhone 6...Plus.
iPad mini is more than enough differentiated from the iPhone lineup.

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