In the following video, senior technology analyst Eric Bleeker fields a question from a reader about the threat that an iPad Mini could cannibalize sales of existing Apple iPads, which have a higher price point.
As Eric notes, Apple currently maintains about 60%-70% of the tablet market. The question has been whether Apple can maintain a dominant market share in tablets similar to what it had in MP3 players, or whether its share will fall to lower levels that are similar to smartphones.
If Apple wants to shoot for higher market share, it needs to address different audiences. With the Kindle Fire catching on by selling a smaller screen at a lower price point and the Nexus 7 finally building Android traction, the clear area Apple needed to respond to at a lower price point is the consumer segment. In the end, Eric says a level of cannibalization is a fair trade-off for Apple's ability to offer a product where competitors are gaining traction. The company that's unable to intelligently cannibalize itself is the one not built for the long run.
To see Eric's full thoughts, watch the following video.
Eric Bleeker has no positions in the stocks mentioned above. The Motley Fool owns shares of Apple, Amazon.com, Google, and Microsoft. Motley Fool newsletter services recommend Amazon.com, Apple, and Google. Try any of our Foolish newsletter services free for 30 days. We Fools don't all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.