Several years ago, when competitors began introducing 7-inch tablets, Steve Jobs was famously quoted as saying that such a form factor would never come to Apple, calling the category “dead on arrival.” Of course, times change and so did Apple’s strategy with the debut of the 7.9-inch iPad mini, a device that by all accounts appears to be another home run for the company. While some believe that Apple’s success, challenged on all sides by the likes of Samsung and Amazon, will be fleeting, at least one analyst thinks Apple’s winning streak will last for some time to come.
In a new report, Strategy Analytics forecasts that the iPad will be the dominant consumer tablet for at least the next the five years. However, what consumers consider an iPad may shift over time, as some in the tech community are so enamored with the new iPad mini—which remains sold out at many stores—that they’re calling it the “real iPad.” That’s a far cry from 2010 when the late Jobs claimed that 7-inch tablets were “tweeners: too big to compete with a smartphone and too small to compete with the iPad.”
Unboxing the Apple iPad Mini
But that opinion eventually changed as internal conversations at Apple, uncovered during a legal skirmish with Samsung, revealed that competition had prompted the company’s executives to consider entering the new category. In a January 2011 email to other executive team members, Apple vice president Eddy Cue wrote, “I believe there will a 7-inch market and we should do one. I expressed this to Steve [Jobs] several times since Thanksgiving and he seemed very receptive the last time.”
During a recent earnings call, however, Apple’s Tim Cook denied that the company is actually competing in the 7-inch marketplace and said Apple would “never” introduce a truly 7-inch device.
“The difference in just the real estate size between 7.9, almost 8, versus 7 is 35 percent, and when you look at the usable area, it’s much greater than that,” Cook said at the time. “It’s from 50 to 67 percent and also, the iPad mini has the same number of pixels as iPad 2 does, so you have access to all 275,000 apps that are in our App Store that have been custom designed to take advantage of the full canvas.”
Aside from consumer hardware preferences, the report also concludes that the current revenue bonanza surrounding paid mobile apps will decline, eventually leading to an apps market mostly dominated by free downloads. The report predicts that the average price of a smartphone app will drop to just $ 0.08 by 2017.
“App Stores will also see a revenue crunch as more revenue is earned from advertising—revenue generated outside the bounds of the app store—and will need to prepare,” said Josh Martin, Strategy Analytics’s director of apps research.
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