Apple May Meet Tablet Competition With a Smaller iPad
The tech companies are at it again — trying to catch the blockbuster iPad in a race to win the tablet market. — Google on Friday began shipping its Nexus 7, which is smaller and less expensive than Apple's iPad …
Context & Ripple Effects
Google has moved first: its Nexus 7 shipped Friday, a smaller, cheaper tablet aimed squarely at the iPad, part of a strategy the NYT's Bits blog framed back in March as an attack on both Apple and Amazon. The question this story answers is whether Apple will defend the low end of a market it has so far served with a single $499 device.
The supply-chain groundwork has been visible for months — the Wall Street Journal reported in February that Apple and its suppliers were testing a smaller-screen tablet, and again on July 4 that a launch appeared near. The NYT now adds the pricing signal, picked up widely (MacRumors, Business Insider, Fortune, SlashGear and others): a smaller iPad costing 'significantly less' than $499 could arrive this fall. It remains a report, not an announcement.
First-order effects
- Apple faces a direct price-and-size attack from the just-shipped Nexus 7 for the first time, pressuring it to extend the iPad line below its $499 entry point rather than rely on the full-size model alone.
- Google gains a shipping product in the small-tablet segment while Apple's counter is still unannounced, giving Android a window to establish the 7-inch category before Cupertino responds.
Second-order effects
- Amazon, whose Kindle Fire defined the cheap small tablet, is reportedly working on a bigger Kindle Fire to push upmarket toward the iPad — the same squeeze running in both directions.
- Apple's component suppliers, already testing smaller screens per the February reporting, would need to ramp a second iPad form factor, splitting production and potentially straining yields ahead of a fall launch.
Third-order effects
- If Apple does go smaller and cheaper, the tablet market settles into size-and-price tiers — flagship large tablets at the top, budget 7-inch devices below — ending the one-device-per-vendor structure that held through 2011.
- A sub-$499 iPad would mark Apple's first retreat from premium-only pricing in a post-iPhone category, a precedent competitors would cite in every subsequent market where Apple holds a single high-price product.
The trend: Tablets are fragmenting into distinct size and price tiers, with Google's Nexus 7 forcing Apple to choose between defending its $499 floor and meeting rivals in the small, cheap segment.