“It is rumored that Apple may release a smaller version of the iPad in the near future, likely to come in at a lower price point and a form factor similar to the Amazon Kindle Fire and Google Nexus.
Apple has defined and dominated the consumer tablet market since the release of the original iPad in 2010, still enjoying an over 60 per cent market share today. The original iPad sparked the tablet market, expanding it from one of tens of thousands to one of tens of millions. With this background, a useful tool to analyse the consumer tablet market can be the question - "why not an iPad?" The iPad's market dominance along with Apple's brand strength mean that any consumer considering a tablet will default to the iPad, and will need a significant argument to be pulled away from this preference.
Considering Apple's dominance, it is hard to say that any competitor has fully succeeded in offering consumers this argument, but if any argument can be made, it revolves around price. The Kindle Fire, for example, one of the few tablets to have established a legitimate market foothold next to the iPad, retails at USD199, compared to the latest iPad's range of about USD500 to USD800, a stark difference.
Apple's strategy for a smaller, cheaper tablet would drastically reduce this price differential, make a harder argument for customers to deviate from Apple, and mean a tougher road ahead for players like Amazon and Google. Apple has dominated the early stages of the tablet market, and if this latest rumor is true we can expect that dominance to continue.”