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Is the iPad mini Overpriced? [Analyst Opinions]

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As widely anticipated thanks to the rumor mill built around Apple, the iPad mini was launched with a great fanfare yesterday. But everybody was surprised when Apple announced the iPad mini pricing, and the first reaction of future iPad (mini?) buyers was among lots of smiling faces: the device is overpriced.

iPad mini

One thing is true: the pricing is $79 higher than the expected $250, but this doesn’t exactly mean it is an overpriced device. Another fact: Apple’s shares dropped after the announcement.

But what do analysts think about the iPad mini? Do its features justify the $329 price? We picked up on some of the analysts thoughts about the iPad mini and its sales:

Michael Walkley of Canaccord Genuity cited by Reuters

“We believe the iPad mini with its $329 starting price for the 16GB WiFi only model will help Apple reach a new customer base, particularly for holiday gifts to teenagers that may not have been able to afford the higher-end iPad,” Canaccord Genuity analyst Michael Walkley wrote.

Ben Reitzes of Barclays Capital, cited by Reuters
“We were hoping the price would be at least a little lower given its competition is situated as low as $99, with many starting in the $199-$249 range,” he said.

Chris Whitmore, Deutsche Bank cited by AppleInsider
“Due to the high quality of the hardware, we expect the device will be very well received by consumers once they have an opportunity to test it,” Whitmore said. Deutsche Bank has reiterated its price target of $850 for AAPL stock.

J.P. Morgan’s Mark Moskowitz, cited by CNET

“In our view, the larger screen size and iOS 6 capabilities of iPad Mini stand to be good enough to grab share from the $199 tablet crowd.
We think the iPad Mini, coupled with the 4th-gen iPad, underscores Apple’s accelerated refresh rate of important devices and software,” he said. “With the iPad Mini and the new 4th-gen iPad, we believe Apple does not plan to forgo the profitable parts of the lower-end segments in tablets.”

What do you think: is the iPad mini overpriced?

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  • All these analysts completely miss the point. It will be a very cold day in hell when Apple does something *just because* the competition does it. Repeatedly, they’ve shown a tendency, when faced with something new in competition, to sit down, think it over, make it their own, then release – a script that most companies skip steps 1-3. Never has an Apple product price been set by a competing product, and yet they still remain to sell well.

    Analysts say “Expensive”. Consumers say “Gimme!” I think we all know who’s going to be right.

    As for the answer to the question, by itself is the iPad mini overpriced? I would say not. I would say that the Kindle Fire and Nexus 7, both supported by low-margin, high-volume businesses like shopping and advertisements, are wickedly underpriced and I would be really unhappy to be an investor in the relevant companies right now.

  • wuju

    It would be perfect if it has Retina Display. However, it does not, so $250 will be my sweet spot.

  • crosseyed_mofo

    and you just know that they already have “retina” as the selling point for the next mini… its so obvious to the point of insulting

  • FragilityG4

    Next year they will most likely release a retina one at this price point and keep this one on as a low priced one probably at $250 … My guess.

  • Sly

    As previously mentioned, with the A5 chip and no retina, it should have hit the $249 mark but let’s not forget, they couldn’t price it under the iPod touch.

    This is also clearly just for the holiday season. Expect retina and and updated processor by the second quarter of 2013.

  • The original iPad started at $499, with no cameras, no retina, etc. 2.5 years later it starts at $499 with 2 cameras, retina display, A6x, Siri, etc. So consider next year’s iPad Mini, or the following version. It will be $329 with retina, GPS(?), NFC(?), a faster processer, etc. while making a profit, instead of selling it at a loss like its competitors

  • “Another fact: Apple’s shares dropped after the announcement.”

    Historic fact: Apple’s shares have dropped after every announcement other than a financial one. Apple’s stock goes up in the lead up to an event and a few weeks after an announcement, as people get the products in their hands and sales go through the roof. Steve Jobs has said as much and that is why they never follow the market, that market follows them. It’s just a matter of at what point the analyst jumps into the trend cycle.

  • this, totally this.

  • anon

    Who’s going to buy this when a ‘real’ iPad with retina display plus faster A6X cpu can be for just a little bit more? Ridiculas overpriced product indeed!

  • Geeta Dutt

    It’s not overpriced when it just works, looks lovely and is a pleasure to use. One gets what one pays for.

  • kkritsilas

    Apple really doesn’t aim for price points, nor do they do what everybody (from tech blogs to analysts) want them to. Apple does as it sees fit, prices it in order to make a profit, makes sure the product is engineering complete to the extent possible, and then releases it. Apple doesn’t care if the device specs are not at the cutting edge, nor does it really care what the tech “geeks” (like myself, and most people on the board) think. They want to ship a good product, at a profit, to regular (non-geek) customers, and will make sure their experience is as hassle free as possible. It my be that the geeks will point out that product XYZ is better/faster/has better specs/etc., but Apple isn’t even trying to sell to geeks, so their opinion is really not much of a consideration. It seems to be doing well with that strategy, to the point of a >$55o Billion market cap, increasing sales quarter after quarter, and increasing profits to go with it. The company has over $100 Billion in cash. So de we really know better?

    Kostas

  • kkritsilas

    A 7.9″ retina display device couldn’t be profitably made at $249. Simple as that. A little disappointed that they didn’t use the A5X CPU from the iPad 3, but I would guess that the reduced pixel count didn’t really need the extra GPUs of the A5X, and it may have increased battery consumption. They also probably had a bunch of A5 inventory to get rid of.

    Kostas

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