[ethyreal]

"A lot of folks, especially Apple supporters, like to characterize Amazon as irrational, even crazy, for its willingness to live with low margins. It must be frustrating to compete with a company like that."

This assumes that Apple is actually competing with amazon. Does BMW compete with say Ford.... maybe but really they are after different markets. Apple has said numerous times they are not interested in going after the low end market.

[cageface]

The iPad mini is quite obviously a response to cheaper, smaller Android tablets, the best selling of which is the Kindle. Apple is clearly interested in the customers on the fence between a Kindle and a more expensive but higher quality device.

[demallien]

I'm not so sure that it is that obvious that the iPad mini was in response to competition. My personal theory is more that they recognised that there was an unfulfilled need for an iPad that was smaller / lighter than the original. For example, many people find an iPad too heavy for long periods of reading, but an iPhone is too small. As this is one of the biggest use cases for tablets, it is not surprising that Apple wanted to make a product that is optimised for that use case.

Another way to look at it - if competition was the motivation for the iPad mini, it would have cost $50 less.

[ygra]

Why bother selling it for less if people buy it for more, too? Apple's customers don't really compare prices and features between different options. They won't even consider an Android tablet and why would they? They probably own three generations of iPhones and two generations of iPads already. They'll happily pay Apple's price.

[greedo]

So many unsubstantiated assertions in your reply...

I'm an "Apple customer" and I'm price sensitive, I've also considered many Android based tablets as well as WebOS based tablets. Now we all know that anectadata is of limited value, but compare to no data...

[jusben1369]

"Apple has said numerous times they are not interested in going after the low end market." - Yes, but that's exactly the premise that this author is now questioning. Is that the right strategy?

[atdrummond]

BMW competes directly with Ford in Europe. Prior to the sale of PAG (Aston Martin, Volvo, Jaguar, Land Rover) BMW also competed with Ford-owned brands in the United States.

I'm also certain more people cross shop Fords and Bimmers than one might initially assume.

[dublinben]

Ford might be competition for BMW in Europe, but they certainly aren't in the US. The only Ford I could believe a BMW customer even considering is the Mustang. The base model 3-series coupe is significantly more expensive than all but the top three Mustangs available (GT Premium convertible, Shelby GT 500, GT 500 convertible). If one is in the market for a $40k coupe, they're not going to compare the BMW to the Ford, they'll compare the BMW to the Mercedes, Infinity, and Audi.

[hef19898]

No competition in europe as far as I know. BMW is more "low volume high margin" while Ford is "low margin high volume" (huge generalization here).

Some time I can't fight the feeling that german premium car makers are the Apples of the automotive world...