Apple: iPad Mini Wins Because It's Expensive
Look at the iPad mini. People are willing to pay for something of quality that they know will give them a lot in return. It's no longer a case where it's a race to the bottom to create the cheapest and most easily-produced product. People are realizing that you frequently get what you pay for.
-- Eric Kuhn, The Wall Street JournalNEW YORK ( TheStreet) -- That's an excellent excerpt from an excellent article that reveals where so many otherwise excellent people miss with errant emotional reactions to Apple (AAPL) over the last several weeks. If these folks credit Google (GOOG) with any perceived weakness at Apple, they're really far gone.
Anton Wahlman writes solid articles for TheStreet. I don't agree with him very often, but that doesn't mean his work isn't strong. We just don't see eye-to-eye on much.
While I don't think he dislikes Apple, Wahlman appears in love with Google. A quick glance at his article history reveals that his Google love stems largely from the company's strategy to produce relatively inexpensive ("cheap") hardware.
Wahlman claims there's not much room left to innovate with the smartphone and that it will go the way of the flat-screen television in terms of pricing. He might be right, but that's not the issue.
The meaningfully scary part: Wahlman's not alone. In fact, Google Chairman Eric Schmidt waxes delusional about a "platform fight" between Apple and Android benefiting the consumer with "lower prices" .
Frightening: This notion that producing cheap products somehow makes things better for consumer, company and sector. That's a load of short-sighted, sounds-good-to-cheer, but really-isn't nonsense.
Consider a comparison between Apple's iPad mini and Amazon.com's (AMZN) Kindle Fire.
Here's a refresher of my take on the mini before it was released (you know when people were saying it could never sell at a premium price) via CNBC:
Handle an iPad mini after playing around with a Kindle Fire.
I did yesterday. We have two Kindle Fires in my house. Nice little device. I'm on record several times praising Jeff Bezos for doing this, however I know full well this is not about some "platform fight" or device battle. So does Bezos . He knows he cannot beat Apple here so he produces a tablet -- and takes a loss or breaks even (whatever) on it -- to further Amazon's e-commerce dominance just a little more.
That's a sound strategy that strengthens your core line of revenue. No delusions of grandeur like Schmidt has at Google.
Because, clearly, it would be folly for Bezos to think his $199 tablet can compete competently with anything Apple puts out. He might feign some competitive juice, but he's no dummy.