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The iPad mini will benefit from Android tablet glut

There are many cheap Android tablets just emerging or in the pipeline. At the weekend, I spotted adverts for several no-name brand, but fully functional 7in Android tablets – capable of running most apps – priced at rock bottom levels, undercutting even Google’s Nexus 7.

Over in the US, Barnes & Noble just reduced the price of its Nook tablet – the slate which is making its way over to the UK in October – from $199 (£127) to $179 (£114). Now this may have been done to clear inventory in anticipation of a new model, but the move could also signal a trend in cheaper 7in models trying to compete with Google's hot Nexus 7, which sells for £159 for the basic model.

I also recently received an email from a Taiwanese ODM that for some reason thought I was interested in buying tablets in volume. The company shared details of its manufacturing prowess with me and said that it could create a 7in tablet for under $100 (£64) if I was interested. Actually, this was the third such email I have received, but all have come from different companies.

On my nightstand, there are eight 7in tablets and two 10in models that I have been testing. All are Android models that reside alongside my iPad, my most used tablet overall. As I look at this pile of tablets, it becomes clearer to me that tablets are the new PCs. We will be witnessing a glut of them from big-name brands and no-name brands alike starting this autumn.

The good news for Google is that most of them are Android-based tablets. The bad news is that most run older versions of Android and Google's inconsistency across all of these models just adds to consumer confusion. This confusion might be good news for Apple.

In the recent Apple versus Samsung trial, Samsung was forced to present documents to the court which showed that over a two year period, it had only sold 1.4 million tablets. In that same period, Apple sold over 80 million. Apple owns a 70 per cent market share in tablets and Samsung has barely 9 per cent, according to iSuppli.

There are widespread rumours that Apple is about to release a 7.85in iPad mini to compete with all of these 7in Android tablets. This is still speculation, but my company is seeing hard research that suggests potential Android tablet consumers would think hard about upgrading to an iPad mini, even if it costs as much as a hundred notes more, because Apple is a consistent company with excellent service.

Another factor which bodes well for Apple is that when consumers get confused by the dozens of Android tablets, they look for a product that is simpler to understand and represents a more stable platform, like the iPad.

Interestingly, all of my colleagues in the tech research business think that if Apple rolls out a smaller iPad under $300 in the States (likely translating to around £200 in the UK), it would be a monster hit and have a negative impact on 7in Android tablets. My Taiwan contacts also echo the same sentiments.

An even worse problem for Android tablet manufacturers is that they would be forced to drop prices to compete and margins would shrink even further. That could really shake things up at the low end. In fact, the only companies that could keep pushing out 7in tablets while cutting prices down further would be Amazon and Google, firms which can tie future sales and advertisements to an amortised model.

The only bright spot in all this is that consumers will have the option of buying very low cost tablets that will introduce them to the tablet lifestyle. It would not surprise me, though, if the consumer confusion caused by the Android tablet glut results in Apple becoming the big winner in small tablets.