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iPad Mini to grab sales from $199 tablets, says analyst

With iOS 6 and a 7.9-inch screen size, the iPad Mini will scoop up market share from rival tablets, according to a J.P. Morgan analyst.

Apple's new iPad Mini.
Apple's new iPad Mini.

Starting at $329, the iPad Mini is pricier than other mini tablets, but the product will still capture sales from lower-priced rivals, says J.P. Morgan's Mark Moskowitz.

Though the price tag on Apple's new tablet was substantially higher than J.P. Morgan's estimate of $249, the features and specs were better than expected. The analyst had thought the base model would start at 8GB of storage, but Apple kicked it up to 16GB. The Mini lacks the Retina display of its bigger sibling, but Moskowitz was still impressed by the "look-and-feel" of the small tablet.

"In our view, the larger screen size and iOS 6 capabilities of iPad Mini stand to be good enough to grab share from the $199 tablet crowd," Moskowitz said in an investors note released late yesterday.

The iPad Mini will compete with such smaller rivals as Google's Nexus 7, Amazon's Kindle Fire HD, and Samsung's Galaxy Tab 2, all of which are priced at $199 for the entry-level models.

Available starting November 2, the Wi-Fi versions of the iPad Mini will run $329 for the 16GB flavor, $429 for the 32GB edition, and $529 for the 64GB model. Two weeks later, the 4G LTE versions will debut at prices of $459 for the 16GB edition, $559 for the 32GB model, and $659 for the 64GB flavor.

The November 2 rollout of the Wi-Fi models means that Apple is looking for strong demand during the holidays.

As such, any downturn in product sales over the September quarter is likely to be short-lived as the iPad Mini, 4th-generation iPad, and iPhone 5 all contribute to a strong fourth quarter.

"We think the iPad Mini, coupled with the 4th-gen iPad, underscores Apple's accelerated refresh rate of important devices and software," Moskowitz said. "With the iPad Mini and the new 4th-gen iPad, we believe Apple does not plan to forgo the profitable parts of the lower-end segments in tablets."

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