iPad Mini Is Apple's New Cash Cow: Top 3 Reasons Why

By Sumit Passary | Oct 20, 2012 11:37 AM EDT

Previous image Enlarge Close Next image

Share This Story

Apple has already sent out invitations for its much-awaited event on Oct. 23. iFans are hoping that the company will launch its highly-anticipated iPad Mini, but the burning question is: Will the smaller tablet offering prove to be Apple's new cash cow?

The previous iterations of the iPad have been very popular in the tablet market. The current 9.7-inch iPad has a starting price of $499 and some buyers may consider the pricing as expensive. With the increase in number of smaller 7-inch tablets it seems that Apple is looking to dive into the smaller tablet arena and throw the gauntlet to its rivals with its 7.85-inch iPad Mini.

Here are the top three reasons why the iPad Mini could well become the cash cow for Apple.

1.Pocket Friendly
As the rumors and leaks suggest, the iPad Mini will be smaller than the current crop of iPads. Therefore, the cost to assemble a smaller 7.85-inch tablet will be significantly lower when compared to the 9.7-inch iPads. Pricing leaks indicate that the iPad Mini will start selling at approximately $322, which is a lot cheaper than the $499 price tag which the current iPad sports.

Critics may argue that consumers may not want to opt for the iPad Mini as the average starting price for other 7-inch alternatives is a lot lesser at $199. However, given Apple's popularity and its iconic status as a quality product manufacturer, the scales may tilt in the Cupertino-based company's favor.

2.Increase In Demand For Smaller Tablets
Of late, tablet makers have been coming up with smaller tablets like Nexus 7 (Google), Galaxy Tab 7 (Samsung), Kindle Fire HD (Amazon), Nook HD (Barnes & Noble), et al. With the increase in smaller tablets in the market, Apple may want to capture a substantial chunk and tap the potential. Introducing a smaller iPad will increase the company's chances of getting a considerable slice of the tablet market pie.

3.Approaching Holiday Season
With the holiday shopping season around the corner, tech companies would be looking to up the ante in a bid to stay ahead in the race. Many potential customers will be shopping for tablets and new gadgets and, therefore, the decision to launch a new tablet in time for the holiday season would make perfect business sense for Apple. The iPad Mini would attract additional consumers and help fuel Apple's tablet sales figures.

Apple's product sales are usually fueled by the "Halo" effect i.e., individuals who buy an iPhone are more likely to buy an iPad or Mac. Its products piggyback on this strategy and capitalize on each other's popularity. The Halo effect has been profitable for Apple over the years and it seems that the iPad Mini is on track to join its umbrella of devices.

With the launch of the iPad Mini, Apple would have a new revenue source that would potentially enable it to generate higher revenues and profits each quarter. As a consequence, Apple would be able to retain investor confidence in this volatile economic environment.