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Shedding the Pounds: Why Apple’s New IPad 5 Trimming Strategy May Be the Company’s Salvation

Large IPad 5 Mockup

[Photo Credit: Macgasm]

“The cannibalization of the iPad Mini.”

It’s a phrase that has been used in nearly every article on Apple’s recent stock price troubles this week to refer to the impact the iPad Mini has had in large iPad sales. The iPad Mini is outselling the large iPad shamefully, and has done damage not only to large iPad sales but Apple’s pockets as well. Earlier this week, Apple CEO Tim Cook admitted that iPad Mini is responsible for lower profits, but also claimed that the iPad Mini was a “great opportunity” for Apple and its commitment to innovation. While Tim Cook said this (and I don’t doubt he believes it), I also think that Tim Cook’s demeanor in the face of falling stock prices is one of “saving face” – that is, don’t let the media know that you’re concerned, don’t look worried. Just stay confident, cool, and calm. The three C’s.

Tim Cook’s statements about the iPad Mini sounded as though Tim Cook and Apple are content with their revenue increase and profit decrease; new reports suggest, however, that this is not the case. According to Jeremy Horwitz of iLounge, Apple is not yet done with its large iPad. Rather, Apple looks to have a “trimming” strategy for the 9.7-inch veteran that will help it “shed the pounds” and gain a more sleek look and feel than it has had in its three-year run. In other words, the large iPad is “getting a makeover.”

The iPad 5 (as it seems certain the new iPad will be named), will not have bezels on its left and right sides and will have edges that are redesigned to match those of the iPad Mini. Apple’s thought in this whole process is that, since the iPad Mini has been a hit, why not allow the iPad Mini to lead the way in growing our large iPad sales once again? Do you see the reasoning? The company’s reasoning here is important, since it could be the company’s salvation in lieu of falling stock prices and investor confidence. Apple is not content with its iPad Mini’s success, although it is certainly an achievement when you consider that the Mini’s price tag of $329-$529 is far more exorbitant than Google’s seven-inch Nexus 7 ($199-$249). The company is struggling to maintain its profit margins despite the iPad Mini’s success because the small tablet does not sell for the same cost. The mindset, thus, is as follows: improve the 9.7-inch tablet by making it thinner than the current model, then maintain pricing for the large tablet and bring back sales. It is certainly a successful one, and one that I look forward to seeing played out in the coming days.

The iPad Mini will lead the way in not only turning around large iPad sales, but also will improve upon its former success: this October, sources say that the new iPad Mini will come with Retina display, a feature that many tablet lovers have craved since the first iPad Mini emerged on the market. At the same time, many have yet to consider that there will be a price hike that comes with the inclusion of Retina display into the mini tablet. Thus, prices will rise from $329-$529 to $399-$599 to pay for the use of Retina technology. The rising prices will not only help Apple’s revenue, but possibly push some money back into Apple’s stock prices and raise investor confidence again. While the company has fallen, its best days may be just around the corner.