Report: $299 iPad mini to land in October

Posted by Shane McGlaun

Rumors that Apple is planning to launch a smaller iPad tablet aptly dubbed the "iPad Mini" have been circulating for months, if not years.

Reports of the smaller iPad are resurrected each and every time Apple launches a new version of its wildly popular tablet, although it never quite seems to materialize.

Of course, a smaller screen version of the iPad would actually make a lot of sense if Cupertino wants to make a grab for the lower-end market and compete against cheaper Android tablets such as the Kindle Fire and the new Nexus 7.

If Apple does end up debuting an iPad mini, there is no doubt Android competitors in the lower-end tablet market will suffer.

Such as scenario could very well be approaching, as analysts at Pacific Crest claim an iPad mini measuring 7.85-inches will debut at October at a $299 price point.

Now whether or not Apple makes a smaller iPad remains to be seen, although it is probably worth noting that Steve Jobs was supposedly dead set against the idea. Still, Apple CEO Tim Cook could very well take another route. Personally, I've always thought it would make a lot of sense for Apple to offer a smaller and cheaper iPad, as I believe it would sell quite well. However, it could also cannibalize sales of the more expensive and larger iPad.

The origin of the latest rumor? According to Hexus, it is based on new screens showing up in the supply chain.

"Based on our supply checks, we expect Apple to launch a 7.85-inch iPad in October. We anticipate an entry-level 7.85-inch iPad with 8GB of NAND capacity to price at $299 with an initial gross margin of 31%," Pacific Crest wrote in an industry note obtained by Hexus.

"We estimate Apple will sell 10.0 million 7.85-inch iPads in FQ1 (Dec.) 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-inch iPad (for every four 7.85-inch iPads added, we reduced our 9.7-inch iPad estimate by one), so our total F2013 iPad estimate increases to 91.6 million from 65.2 million."

Meanwhile, analyst Brian White from Topeka Capital Markets says he believes a smaller screen iPad would likely be more popular in China than other countries.

"We believe the launch of an iPad Mini, we expect September, will prove very popular in China. Ultimately, that’s the iPad that will sell in mainland China. It’s not just the form factor, but also the price point."