Apple recently announced the iPad Mini which has had mixed reviews from analysts. The iPad Mini will have a 7.9-inch screen and will be priced at $329, compared to the regular 9.7-inch iPad that is priced at $499. It is expected to compete against prodcuts like Amazon's Kindle Fire and Google's Nexus 7, which are similar in size but priced from $159 to $199.
Steve Jobs was opposed to a smaller version of the iPad and it will be interesting to see how the product does. I don't expect the new product to create a shift in the overall demand of tablets, so which products is the iPad mini really competing against? If Apple is trying to compete against the lower end products like the Kindle Fire and Nexus 7, why would they price it $130 to $170 more than those products? I agree with analyst Michael Walkley who stated, "While we believe these strong sales will come largely at the expense of Apple's
competition, we concede iPad Mini will likely cannibalize iPad and iPod Touch
sales." If people can't afford the regular iPad at a price of $499, why would they pay $329 for the iPad Mini instead of getting the Kindle Fire for $159? I think that the new product will draw more potential buyers away from the regular iPad than the Kindle Fire or Nexus 7.