An entry-level 7.85-inch iPad is getting ready for a fall release, but this information doesn’t come directly from Apple, which is keeping a tight lid on things.
Instead, Pacific Crest analyst Andy Hargreaves is predicting that the company will introduce a smaller version of its tablet computer on the heels of Google’s new $199 Nexus 7.
“We anticipate an entry-level 7.85″ iPad with 8GB of NAND capacity to price at $299 with an initial gross margin of 31%. We estimate Apple will sell 10.0 million 7.85″ iPads in FQ1 (Dec. 2012) and 35.2 million in all of F2013. Based on estimated component order volume, we believe our iPad mini unit estimates are well within Apple’s production capacity. We anticipate 25% cannibalization of the larger 9.7″ iPad (for every four 7.85″ iPads added, we reduced our 9.7″ iPad estimate by one), so our total F2013 iPad estimate increases to 91.6 million from 65.2 million,” he wrote in a report published Thursday.
Apple has long been rumored to be developing a 7-inch version of the iPad, but the company has employed its usual cone of silence on the topic.
Tom Mainelli, IDC’s research director of Mobile Connected Devices, believes that Apple could increase its market dominance with a iPad mini. “If Apple launches a sub-$300, 7-inch product into the market later this year as rumored, we expect the company’s grip on this market to become even stronger,” he wrote in a report issued ahead of the Nexus 7′s unveiling.
Hargreaves suggested that Apple would kill the $399 iPad 2, and could introduce a 16GB iPad mini for a similar price. He also expects a refresh in October for the current 9.7-inch iPad, speculating that it will have a lighter battery and oxide TFT screen and new camera location.
Hargreaves cranked up his price target for Apple from $630 to $690.
While the Nexus 7 isn’t a full-on iPad-killer, it far out-classes anything else offered in the 7-inch category, and most 10-inch tablets too. It does this by offering smartly designed, powerful hardware and the best Android tablet experience to date. For those who only use their gadgets to surf the web, check e-mail, play games and update their social media feeds, this might be the gadget of choice than iPad, until Apple’s new 7-inch display arrives.
The Nexus 7 sells for $200 with 8GB of storage. That’s the same price as the Amazon Kindle Fire and Barnes & Noble’s Nook Tablet at the same storage capacity. If you want a bit more room to download HD movies, music, games and apps, you can get the 16GB version for $250.
However, nothing compares to the Apple iPad just yet, and it will be interesting to see how consumers react to the smaller model.