A 7-inch iPad Presents Challenges to Apple’s Competition

on August 24, 2012

A 7-inch iPad will put Apple in some very unfamiliar territory in the tablet market — it’s an area currently dominated by Android-based devices. However, Apple’s entry into that segment will also present some seemingly insurmountable challenges to those same companies.

iPad screen imageWhen Apple first released the iPad, it was the only player in that market, so it stands to reason that it completely dominated the tablet scene. Some companies tried to compete with Apple, but quickly realized their foothold was just too strong.

What the competition did to combat that was move to a smaller form factor, a place where Apple didn’t make a product. That made a lot of sense, and it worked. The other tablet-makers quickly gained their own foothold in the market.

With a 7-inch iPad, Apple will, for the first time, take on its competition on their turf. This will be a real test for Apple and the iPad brand, but one I’m convinced they will easily win.

This isn’t the first time Apple has taken on its competitors using this strategy. I’ve mentioned before that in the MP3 player market, Apple released an iPod and then came back later to release new iPods of varying sizes. Essentially what they did was keep squeezing its competitors out of the markets it entered.

I see the exact same thing happening to the tablet market. Apple released the iPad and dominated that market. Once its dominance was complete and its competitors had moved on, it will release a product in that segment as well.

Apple is not entering the 7-inch tablet market to take a few market share points away from the incumbents, it wants to totally control that space with the iPad.

Let’s face it, the iPad is a huge brand, so consumers recognize and identify with it. But there’s more to the story than that. Apple also has the infrastructure of iTunes and iCloud on its side.

The ability for Apple to offer its customers music, television shows, movies and educational content, synced across all devices and computers is unique and powerful.

Here’s how I see the tablet market playing out after a 7-inch iPad release:

  • Apple will continue to dominate the 10-inch market that it does now.
  • Apple will take a massive chunk of the 7-inch market
  • Amazon will continue on as it has been. Not much change
  • The rest of the market will see diminished share of the tablet market

The problem for Apple’s competitors is that there is no where else to go. If they go down much more in size, the tablet becomes a smartphone. If they go up beyond the size of the current iPad, it becomes too big to be useful.

Apple is in a position to decimate its competitors. All it needs to do is release the 7-inch iPad.