As more and more non-Apple tablets enter the market between $150 and $250—and erode the company's tablet market share as a result—many believed Apple would use the second-generation Mini as an opportunity to compete in this lower-tier space.
Just like how the iPhone 5C launched as a mid-tier product, not an entery-level smartphone, the iPad Mini remains one of the more expensive "small" tablets around. The original Mini was given a price drop of $30 down to $300, while the new Mini with Retina actually costs more: $399 in the US. The classic, or larger, iPad—now called the iPad Air—is keeping its $500 price point.
"This is the clearest statement Apple could have made that it is only interested in competing in the premium tablet space," says Jan Dawson, chief telecoms analyst at Ovum. "The yawning gap between the specs of the cheaper iPad Mini and iPad 2 and the new iPads signifies that it is only willing to compete at the lower price points with older models."
Dawson believes this means Apple's share in tablets will continue to fall as Android's share rises over the coming years. But Apple never said it wanted to sell the most; it wants to sell the best. And these iPads will maintain a substantial profit margin with these price points.
"It seems as though Apple is trying to push average selling prices for iPads back up again after they've dropped steadily over the past year," the analyst remarks. "Both devices should sell very well, especially over the holiday period."
In the end, Apple's product updates were solid, if not breakthrough. And for now, that should be enough for the world's largest technology company. For now.
"It represents a good enough boost to the previous version to trigger good upgrade sales and get iPad shipments growing again, which was a key objective for this launch," Dawson affirms.