Rumored iPad mini could make a splash

The $200 tablet has become a niche market -- and Apple may be looking to compete in it.

By Trefis Feb 24, 2012 1:32PM
Image: Breaking wave © Martin Ruegner/Digital Vision/Getty ImagesSpeculation is rife that Apple (AAPL) may come out with its next generation iPad, the iPad 3, in March. At the same time, rumors about the release of a smaller iPad, or iPad mini, are also gaining traction.

According to one report, an iPad with a smaller screen is undergoing tests. We believe a smaller and cheaper iPad could be a good strategy and would help Apple compete with low cost tablet vendors like Amazon (AMZN).

The iPad accounts for about 13% of our $550 price estimate for Apple stock. Our price estimate is about 5% above the current market price.


Companies like Amazon and Research In Motion (RIMM) have introduced lower-priced tablets to challenge Apple in the tablet market. Amazon's Kindle Fire costs $199, and RIM slashed its basic tablet pricing to $199 a few weeks ago. The $200 tablet has become a niche segment, and Apple might introduce an iPad mini to specifically target it.


Apple iPad Units Sales

We believe the iPad 3 will be a high-performance iPad with new features like voice-recognition service Siri -- presently an important element in the iPhone 4S -- and a high-resolution screen. Both an iPad mini, though unconfirmed, and the iPad 3 would ensure Apple's continuous dominance in the tablet market and may provide a trigger to Apple's stock as more information emerges.

Tags: AAPLAMZN
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