I've been speculating unhealthily about an iPad mini for the past couple months, like many others.
I often come back to trying to figure out how the price points can work out. Apple always has supremely logical, even elegant, pricing structures at any given time. How can Apple hit the $250 range with an iPad 2-class device without overlapping substantially with other products?
The usual pattern is that you see the maximum price of one class of product be a small step below the minimum price of the next class up. That's currently clearest in the difference between the iPod touch 4th generation (32GB, $249) and the iPod touch 5th generation (32GB, $299).
I think the key is in the 5th generation iPod touch. It is an iPad 2/iPhone 4s-class device, processor-wise (with a lower-quality camera and a higher-quality display).
What if the iPad mini was the same device as the 5th generation iPod touch?
Same internals, cheaper (non-retina) display traded for a larger battery.
I mean: identical boards and chipsets internally for all but power and display/touch surface management…
Seen this way, the iPad mini's price points make a lot of sense as being parallel to the iPod touch: 32GB storage for $300, 64GB storage for $400…
And the capper, the must-get feature for the holiday season… an 16GB iPad mini for the magic $250 price point.
(The 4th generation iPod touch having now established a recent precedent for the marginal price of 16GB going to a 32GB device.)
The riddle of Apple's price structure is thus solved. The prices don't have to complement each other in a way that one becomes the upsell target for the other: they are in lockstep.
The hypothetical 8-inch iPad really does become an oversized iPod touch, as some early critics of the iPad had asserted.
Forget the Moore's Law strategy for product segmentation, try form factor. We've seen hints of that with iPhones and iPads alternating in roughly 6 month increments (and price comparisons are definitely obscured by the generous margins that phone subsidies provide), but I think that strategy might become much more obvious this autumn.
These are distinct devices: one ultra-portable and pocketable, the other one being a portable mini content consumer. There's a difference, right?
So this also becomes a huge experiment: will consumers lean predominantly toward one or another form factor, or will both remain viable in the marketplace?
Bonus question: how far would people have to favor one for the other to be phased out? Two to one? Three to one?
The magic of this, the one where you smile and nod knowingly at Tim Cook being the CEO, is that it doesn't matter to Apple whether the newest iPod touch or the iPad mini catches fire in the marketplace: nearly all the parts that matter could be exactly the same.
We potentially have an answer to the eternal question: how does Apple make a profit on a tablet at $250?
Economies of scale, the likes of which we have never before seen in the computer industry.
Even if the iPad mini is an utter "flop", and sells no more than a couple hundred thousand units, the manufacture and assembly of the key components are subsidised by the iPod touch.
So if it isn't clear, I'm siding with the speculation and rumors that favor the 1024×768 screen on the iPad mini. That is completely in line with the graphics capabilities present in the chip that was optimized for the iPad 2 and famously underwent a critical die-shrink, lowering costs and improving power efficiency.
I think that Apple hasn't completely solved how to drive a 2048×1536 iPad display cheaply and compactly. The new A6 processor has the raw oomph of the 3rd generation iPad, however, as expressed in the iPhone 5, it lacks the memory bandwidth to support a retina-class iPad display optimally.
Well, obviously I was a bit disappointed by how things turned out. I am curious as to what the internals look like, still: I will be watching intensely for the first tear-downs next week. However, the bits of the promo video that show shots of the iPad mini internals don't much resemble the iPod touch internals.
I wonder why not.