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Why Apple's 'iPad Mini' Is Such A Risky Bet

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Apple has taken everything big about the iPad and everything small about the iPhone and iPod and transformed it into something that is altogether medium: the iPad Mini, which the tech behemoth unveiled at today's Apple event.

The iPad Mini basically looks like a giant iPhone.

In fact, it looks a lot more like an iPhone than it does an iPad.

This is because the mid-sized tablet has been completely redesigned.

Rather than simply shrink the iPad, Apple has designed it to have a big screen in a small body, making it a one-handed device unlike its big brother.

“If all that we had done was take the original iPad and reduce it, all you would be aware of was everything that was missing,” Jonny Ive, Apple’s chief designer said in a video shown at the Apple event. “We felt strongly that the 7.9-inches was exactly the right display size, but it became clear that we had to reduce the borders so that you can pick it up with one hand.”

The result is a device with a screen pushing right up much closer to the edge that looks a lot more like an over-sized iPhone than a miniature iPad.

Specs not Speculation

The screen is 7.9 inches diagonally vs. the 9.7 inch iPad "Big" giving it a nice jump in screen real estate over Google's Nexus 7.

Weighing in at just .68, pounds and measuring as thin as a pencil according to Apple, the device should have been named the iPad Air.

Apple also finally announced a price at today's event.

The WiFi only 16GB iPad Mini will start at $329.

The 4G LTE will be costlier, and there's lots of storage size options for both models that will increase the cost at a disproportionate ratio to the value added.

This means the new iPad will cost a bit more than its direct competitors - which is to be expected from Apple.

All of which sounds like a very smart move by Apple.

Playing Risk with Cannibals

With the rise of the 7" tablet, the coming of Windows 8 and the possibly quite impressive Microsoft Surface tablet aimed at a more business/productivity demographic, Apple's Mini was pretty much inevitable.

But this is also where Apple faces a big risk.

CEO Tim Cook told the audience today that Apple has sold 100 million iPads in just two and a half years. That's a pretty staggering figure.

With an entry iPad Mini priced at just $329 and its larger sibling clocking in at a minimum of $499 (for the latest model) customers will naturally gravitate toward the cheaper model.

Sure, many iPad owners will also buy an iPad Mini - Apple fans are downright redundant in their purchases, which is one big reason the company has succeeded so well in recent years. But many buyers will also start either putting off buying a new iPad Big in favor of the iPad Mini and many new customers will go for the smaller tablet as well.

For one thing, the Mini's resolution is the same as the iPad 2 meaning what you can do with the Big you can do just as well with the Mini.

For another, the nearly-eight-inch screen may end up being the sweet-spot for tablet users. The problem with the iPad is that it's just too big and too heavy for things like reading in bed. The Kindle Fire or Nexus 7 make much better reading tablets. But the convenience of the smaller device doesn't stop there.

The Mini will end up being more portable as well, and boasts higher internal specs than the iPad 3. For all intents and purposes, I can see how the Mini will quickly eclipse the regular iPad.

Some might argue that the bigger iPad screen will make for better gaming or movie-watching, but given how close one typically is to the screen, the less-than-two inch differences in screen size probably won't matter nearly as much as the decrease in overall gadget size and weight.

The Best Bad Choice

Apple didn't really have a choice entering this form factor. The competition cut them to the quick and showed that there was a large and growing market for mid-sized devices. Everything from the Samsung Note "phablet" to the Nexus 7, to Amazon's wide range of options has shown that more choice is better for business.

But Apple does risk cannibalizing its own iPad market in the process. Then again, given the choice of eat or be eaten, maybe cutting off the nose to spite the face is a worthwhile endeavor this time.

Apple basically created the tablet market out of thin air. I doubt they'll lose their predominance in it any time soon, risk or no.

There's no doubt that the Mini will sell like proverbial hotcakes, especially given the proximity of this event with the Holiday Season.

The question is what that means for the iPad and for Apple's bottom line in the long run.

For more coverage of the Apple event, see Forbes' Connie Guglielmo.

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