Is the iOS Market Becoming too Overcrowded?

In the months before the iPad mini’s release, many people doubted that Apple would add a smaller tablet to its product lineup. After all, Steve Jobs, Apple’s former CEO, was famously against the introduction of a tablet smaller than the iPad, claiming that such a device would be dead on arrival.

Steve Jobs was a man who believed in simplification. When he rejoined Apple in 1997, he worked on slimming down Apple’s product lines, cutting out the clutter and leaving the company with just three computers – one for the average consumer, one for mobile users, and one for professionals.

That’s a trend that continued during Jobs’ reign. Each and every device that Apple produced had a specific purpose, including its mobile lineup. There was the iPhone for cellular, the iPad for those who wanted a tablet to read on, and the iPod touch for people who wanted a mobile device that was more portable than the iPad.

All the bases were covered, and have been covered. But now, after Jobs’ death, Apple’s product line is beginning to expand once again. We now have the iPad mini, a 7.9-inch tablet that doesn’t quite fit in with other Apple products because it doesn’t fulfill a specific need.

While the iPad mini was definitely wanted by consumers as evidenced by its impressive sales, did we really need it? This may be the beginning of an unstoppable trend. What about those customers who think the iPad mini is too small and the iPad is too big? Is the tongue-in-cheek iPad Mini Mega in our future?

The array of Android devices on the market may serve as a cautionary tale. There are a slew of Android-based phones and tablets that come out each year, making it difficult for developers to create functional apps for all of the devices. Android devices also become outdated quickly, as new ones are released and developers shift focus.

Apple’s new iPad mini and its fourth generation iPad have added two additional devices to the product line. This means older devices will be rendered irrelevant more quickly, shortening product life cycles, and it also means that developers have additional devices to compensate for when designing new apps.

The original iPad is now becoming outdated after two years with a yearly update cycle, but Apple’s recent third generation iPad won’t last that long. Future devices may suffer the same fate if Apple keeps churning out tablets.

There’s now the iPad 2, the iPad Retina, the iPad mini, the fourth generation iPod touch and the fifth generation iPod touch, which means there are quite a few choices for consumers. All of these devices are priced within $300 of each other, which is a problem when customers can’t decide what to buy. It’s good to have choices, but too many options can create analysis paralysis, leading to consumers who never purchase a device because they’re afraid of making the wrong decision.

Of course, the addition of the mini to Apple’s product line is not all bad. It looks like the smaller tablet is going to be a huge success for Apple. I have a brand new mini that was purchased on release day, and aside from the lower resolution screen, it’s a highly desirable device. In fact, the majority of the complaints that I’ve read are all focused on that display.

A Retina mini, when released, is going to revolutionize Apple’s market. A Retina mini is what we really wanted, and when it comes, it will disappear from store shelves in mere minutes. It’s not going to happen overnight, but Apple’s iPad mini and future iPad minis have the potential to cannibalize the sales of the higher priced, more profitable full-sized iPad.

Customers who would have purchased a more expensive tablet might purchase the cheaper mini, and Apple CFO Peter Oppenheimer stated that the iPad mini was being sold with a much lower gross margin than Apple’s average. The additional reach of the smaller tablet may not make up for the pricing difference, especially with robust competition like the Kindle Fire HD and the Nexus 7.

The iPad already has a lower profit margin than other Apple devices like the iPhone, and the addition of the even less profitable mini may send Apple’s overall profit margin plummeting. That would put Apple stock at risk of a serious decline.

There’s no telling what effect the mini might have on future Apple devices, but one thing is clear – Apple is evolving. Tim Cook is taking Apple in a new direction, and whether that’s a good thing or a bad thing remains to be seen. Was the mini a mistake? What do you think?