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Using Conditional Probability to Justify The iPad Mini

It’s a well known fact Steve Jobs, Tim Cook, and co. had been publicly stating for years that a 7-inch tablet is way too small for a good customer experience.  Cook, current CEO of Apple said in an earnings call last year the following “Let me be clear, we would not make one of the 7-inch tablets,” Cook said during the company’s third-quarter earnings call. “We don’t think they’re good products, and we would never make one.”  Now we fast-forward to today where Apple released a 7.9 inch tablet called the iPad mini.  This device has most of the bells and whistles that the regular iPad has and looks identical, except for the size difference.  What gives?

Apple’s justification for making such a small tablet, a huge change from their 9.7-inch regular iPad, is that 7.9 inches is NOT 7 inches, in fact due to the way screens are measured it’s over 30% bigger than a 7-inch screen.  Other assertions made by Apple to justify this new form factor include deriding other 7-inch tablets for their lack of screen space, saying that 7.9-inches is now optimal, not the 9.7 they previously said was essential for a great tablet experience.  No, none of these are valid justifications for the change in philosophy.

Apple saw a terrifying trend in the tablet market, a market they created themselves.  People were rapidly buying cheaper 7-inch tablets, such as the Amazon Kindle Fire, amongst other Kindle models, and Google’s Nexus 7, amongst other popular Android tablets.  The 7-inch tablet market quickly became a market of it’s own, cannibalizing Apple’s best-selling 9.7-inch iPad.  Now this is where conditional probability comes in.  Apple didn’t want to take the risk of cannibalizing it’s own best-selling product so it saw no reason to create a smaller “inferior” tablet.  We can set the probability of a 7-inch tablet created by Apple to A.  Then, we can set the probability of a 7-inch tablet succeeding from other players such as Amazon, Google, and Samsung as B.  Applied to conditional probability we can say the probability of A, or Apple succeeding the 7-inch market, was heavily influenced by B, the probability of other innovators creating successful products and showing how you can successfully make and market a 7-inch tablet.  The probability of A is much lower than the probability of A given B (A|B).  The rules of conditional probability allow for a logical analysis of this phenomenon.  The probability of A is augmented by the probability of B.

Apple will most likely succeed with this new product due to the influence and reliability associated with their products.  However, Apple would not have even entered this market and would not have succeeded in the market (probability of NOT A), if it were not for other innovators creating the market and succeeding at it (probability of B).  Such a view of the tablet market helps one understand how Apple could pull such a 180 and create a product they “swore” never to make.




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October 2012