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Why Apple is making an iPad mini

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Apple's China manufacturing under threat

Companies that assemble most of the world's iPads and iPhones are struggling to find workers to fill their massive facilities as more young Chinese shun the factory floor.

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Apple is poised to launch an iPad mini as figures show the tech giant's tablet market share in the US fell by 29 percentage points in the past year.

The California-based company has sent out invitations to an event next week, teasing "We've got a little more to show you."

Commentators speculate the event will launch a smaller, cheaper model of the iPad.

An alleged photo of the rumoured iPad Mini which appeared on the Bolopad website.

An alleged photo of the rumoured iPad Mini which appeared on the Bolopad website.

In 2011, 81 per cent of tablet computers owned in the US were Apple iPads, but in 2012 that number fell to just 52 per cent, according to a report from the Pew Research Centre and the Economist Group.

Apple's dominance of the tablet market is more robust in Australia, but it has also suffered, says research from technology analyst firm Telsyte. In 2010, the iPad's first year of release, Apple enjoyed a market share of 90 per cent in Australia. This has since declined to about 75 per cent.

Analysts say the decline is due to increased competition from smaller, more affordable seven-inch tablets running Google's Android operating system.

Pint-sized ... the iPad mini is rumoured to be announced on October 23.

Pint-sized ... the iPad mini is rumoured to be announced on October 23. Photo: Bloomberg

"The iPad mini is coming at a time when Apple is finding increasing competition, particularly in the budget device area," Telsyte research director Foad Fadaghi said.

Meanwhile, overall tablet sales continue to grow rapidly in Australia. Sales exceeded 1 million units in the first half of 2012, and are expected to pass 2.3 million by the end of the year, according to Telsyte research.

Telsyte estimated that 15 per cent of the population own a tablet PC, a figure expected to double to 30 per cent in 2013.

"Within four years half the population will be relying on such a device for a lot of their computing needs, covering education, entertainment, productivity and other applications,” Fadaghi said.

In another challenge to Apple's dominance, Microsoft today announced that the base model of its new Surface tablet will go on sale next Friday for $559, a price comparable to the current iPad.

Despite this, Fadaghi expects the iPad mini to help maintain Apple's market share for the time being and even bolster its share price. "Our expectation is that we'll see a reversal of the share price decline over the last couple of weeks," he said.

Rumours of an iPad mini have been swirling for months despite the late Steve Jobs declaring in an October 2010 call with analysts that seven-inch tablets were "dead on arrival" because they are "too big to compete with the smartphone and too small to compete with the [9.7-inch] iPad".

"The 10-inch screen size is the minimum size required to create great tablet apps," said Jobs.

Times have certainly changed since then and companies such as Google and Amazon have had significant success with their seven-inch Nexus 7 and Kindle Fire tablets, respectively.

By January 2011, before the introduction of the Fire and Nexus 7, the view at Apple appears to have drastically changed when executive Eddy Cue picked up a seven-inch Samsung Galaxy tablet.

"I believe there will be a seven-inch market and we should do one," Cue wrote to other executives in an email released during the patent infringement battle with Samsung.

"I expressed this to Steve several times since Thanksgiving and he seemed very receptive the last time. I found email, books, Facebook and video very compelling on a seven-inch."

In 2003 Jobs said Apple had no interest in mobile phones or tablets and no one wanted to watch video on a small iPod display. In 2008 he said people didn't read any more, then went on to launch the iBookstore.

At a conference earlier this year Cook said Jobs would regularly argue a polar opposite position to the one he had the day before. "This is a gift, because things do change, and it takes courage to change. It takes courage to say, 'I was wrong.'"

with Asher Moses

222 comments

  • My 17 year old son who thinks he is fairly cool would not be seen dead with an Apple.. it only for the geeks.. I getting a feelling that it might be travelling down the same route as Levi jeans

    Commenter
    JP
    Date and time
    October 18, 2012, 6:42AM
    • Looks like the beginning of the end. Steve Jobs' death has taken the halo from the brand - add the Apple maps fiasco and all of a sudden Apple ain't so hip anymore. Looks like it's very popularity has turned the thin rimmed against it while they flock to their new Samsung devices, regardless of how unsightly the now larger bulge is in their skinny jeans.

      I only have one thing to say to all of this: baaaaaaaa.

      Commenter
      Malik the magic sheep
      Date and time
      October 18, 2012, 7:04AM
    • No. iPads are for hipsters and mainstream users who want an appliance. Geeks want something they can personalise, which is the antithesis of the Apple approach. Owning an iPad was geek heaven when they were new because it was something to subvert - hence the whole Jailbreaking community, but Apple are making that harder and harder to do, and there are more rewarding options... Like getting Android running on the defunct HP Touchpad.

      Commenter
      Matt
      Location
      Glebe
      Date and time
      October 18, 2012, 7:27AM
    • I might agree with you on apple but what on earth is wrong with levi jeans? they're usually cheaper and last a lot longer...

      Commenter
      BW
      Date and time
      October 18, 2012, 7:43AM
    • I think you've got it all wrong...
      Apple mobile devices are for the non-tech, non-geek. A geek opts for Android-based.

      Commenter
      JPee
      Date and time
      October 18, 2012, 7:50AM
    • Not sure that I like your generalisation and splitting the population into the cool and geeks, but aside from that a large proportion of the "geeks" prefer Android too - because of the customisability and open source nature of the platform

      Commenter
      Andy
      Location
      Sydney
      Date and time
      October 18, 2012, 7:53AM
    • In 1999, when was 17, if you got caught with an Apple computer you were considered 'special'. In fact, if you had an Apple computer in the 90s then you were considerably uncool, mostly because System 6, System 7, OS8 and OS9 were utterly meant for the toilet bowl. Looking at what Apple has done now, it is insane to think of those heady times in the 90s when it would be preferable to use a typewriter over an Apple Mac.

      Commenter
      Bianca
      Location
      Camden
      Date and time
      October 18, 2012, 7:55AM
    • You son could be wrong... Most people who are 17 think they are cool, but in reality... well he'll grow up and see that Apple is cool.

      Commenter
      Tim
      Location
      Melbounre
      Date and time
      October 18, 2012, 7:59AM
    • Funny then how all the teens have iPhones! And they won't want a virus ridden iPad ripoff that's for sure.

      Commenter
      FrankM
      Date and time
      October 18, 2012, 8:12AM
    • That's true. Apple has become the new Microsoft. It's lost all of it's 'Think Different' appeal. My iPad 2 functionality is so stifled by Apple, it becomes a pain to use. Owning an iPad was great for the first 24 hours, then I realised it was nothing but a shiny expensive toy that I could get no work done on but I could browse Facebook and play Angry Birds. What a waste of money.

      Commenter
      L.V
      Date and time
      October 18, 2012, 8:14AM

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