Apple defends price of iPad mini

Ahead of the iPad mini launch, many were expecting a budget tablet from Apple, the kind of thing to battle Google's Nexus 7 and the Amazon Kindle Fire. When it did launch, the price certainly wasn't in that ball park, starting at £269 for the 16GB Wi-Fi model, going up to £429 for a 64GB iPad mini. Those prices have raised concerns that customers might be put off buying Apple's smaller tablet when it launches in November.

Those concerns aren't shared by Apple. Asked by Reuters if the iPad mini's price could make it too expensive for people shopping for a smaller tablet, Apple's Phil Schiller said he believes consumers will see Apple's smaller tablet as a 'premium product' worth paying that extra for.

'The iPad is far and away the most successful product in its category. The most affordable product we've made so far was $399 and people were choosing that over those devices,' Schiller said.

'And now you can get a device that's even more affordable at $329 in this great new form, and I think a lot of customers are going to be very excited about that,' he added.

Both the Nexus 7 and the Kindle Fire are believed to sell at something around cost price, as those companies look to build a customer base using their hardware. Apple doesn't need to do that and therefore, doesn't need to cut out the profit, said to be between 23 per cent and 32 per cent for US sales.

The risk is that customers flock to the cheaper Nexus 7 (and possibly the future Nexus 10), damaging Apple's dominant position in the market. It's a risk it feels is worth taking right now.

Source: Reuters

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