Most of the experts, however, focused on Apple's other tablet segment, the 7.9-in. Mini.
As expected, Apple swapped out the 1024-x-768-pixel screen for one with four times the pixels in the second-generation iPad Mini. The company also inserted the same A7 SoC as in the full-sized iPad Air, a move that Schiller said quadrupled the smaller tablet's overall performance and boosted its graphics performance by eight times.
Apple's new iPad Air (left) is 20% thinner, 29% lighter than its predecessor; the Retina-equipped iPad Mini (right) starts at $399, a 21% increase. (Image: Apple.)
The new Retina iPad Mini will start at $399 with 16GB of storage space, a $70 or 21% increase. The new iPad Mini will go on sale at some point in November — Schiller did not give a specific date — hinting at the shortages that analysts had anticipated for the device.
Apple also retained the first-generation iPad Mini in its inventory, but lowered the starting price by 9%, from $329 to $299. Many had bet that the first-generation Mini would be priced even lower, perhaps as low as $249, in an attempt to retain market share in the face of the growing flood of cheaper Android-based tablets, including Google's own Nexus 7, which sells for $229 with 16GB and a 1920-—-1200-pixel screen.
Both Milanesi and Gottheil figured that Apple stuck with the $299 price because it couldn't reduce the cost of materials sufficiently to retain its customary high margins.
"But I think consumers will see the value of the $299 price," said Milanesi. "It's a clear difference [between first-generation and the Retina models], and makes more difference in this world than in smartphones, where carriers subsidize. One hundred dollars does make a difference to those people who are looking for their first iPad."
Gottheil, who had expected a lower price for the first-generation iPad Mini, chided Apple for not rolling the dice and competing in dollars. "It's higher than I thought they would do," Gottheil said. "But I suspect they could not do what they really wanted to do, simply on a cost of goods basis."
The $299 price will give Apple a better chance at competing with Android, specifically the Nexus 7, which Gottheil saw as the benchmark rival. "It's a big issue, I think. It's not low enough to make a huge market impact," said Gottheil. "Somewhere around $249 or $269 would have given them the 'Never mind the other guys' advantage."
Milanesi disagreed. "[The] original iPad mini at $299 with the rich ecosystem will matter more to consumers than [a high-resolution display] on competitors' products similarly priced," she wrote on Twitter during the presentation.
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