Apple's iPad Mini Is Just Like Pizza and Sex

NEW YORK ( TheStreet) -- On Monday, TheStreet's Chris Ciaccia told us that Apple's ( AAPL) forthcoming iPad Mini will be the Cupertino company's (I love obvious, newspaper-like descriptors) next hit product.

Ciaccia points to reports of Apple loading the pipeline with up to 10 million units of the device as proof that "any doubts" about the tablet "can be put rest."

While I would stop short of correlating Apple's order with certain success, I never expected the iPad Mini to do anything but crush sales records in the overall tablet market, let alone the niche space of smallish models.

And, because it's from Apple, it will be a strong product. There's no such thing as a bad Apple product. Even when it's not good, it's not bad.

Success, or lack thereof, with iPad Mini from a revenue, unit sales or even margin standpoint means very little. What matters more is how this positions Apple, from an innovation standpoint, for the future.

Theoretically, an iPad Mini is a bad idea. On the surface, it's little more than a reaction to what Amazon.com ( AMZN) has already done.

Amazon entered the tablet market with a cheap knockoff, not to compete directly with Apple, but to further its plans for world domination via e-commerce. Make no mistake about it, Apple and Amazon can -- and pretty much do -- dominate together.

If there's a such thing as frenemies, Apple and Amazon are it. Ultimately, they further one another's agendas. Increased use of Apple devices drives e-commerce. E-commerce sales help further cement the place of tablets and smartphones as societal staples.

Certainly, Apple and Amazon compete by selling content. And, no doubt, Amazon just upped the ante with its new Kindle devices. That said, Amazon will never produce better hardware than Apple does, even if it tries. Jeff Bezos knows this.

An Amazon tablet is like a mediocre slice of New York pizza. Or that guy or girl you turned down in college who looks pretty good after a few beers at the end of the night at age 40.

You'll accept these alternatives when that's all there is, you're really desperate or you need a quick, no-strings attached bargain. You'll enjoy them in the moment, but they cannot compare to the category leader.

That's why the idea of producing a smaller size tablet, simply for the sake of dominating the market, smells like a bad long-term plan by Apple.

Apple sets trends. It doesn't look to what others do, particularly when they're not actual competitive threats, and copy. That's the opposite of Apple culture.

However, if some of the other reports I have read are true, I might not be quite as down on the idea as I once was.

It's almost impossible to follow the rumor flow, but I have seen some encouraging reports about the forthcoming iPad Mini in recent days.

A few have put the price of the tablet at $349. That's a good sign. If an iPad Mini sells for something in the neighborhood of $350, Apple effectively tells people we have produced a tablet that has nothing in common with Amazon and Google's ( GOOG) efforts, other than size (and, of course, size doesn't matter), therefore we can price it at a premium.

That's the Apple way.

You have to take what AAPL hyper-bull Brian White of Topeka Securities says with a grain of salt, however, he, as well as the always dependable All Things D, speculate bullishly on the iPad Mini's design. White goes as far as saying the Mini might be "slicker" than the latest iPad.

If that's the case, you have Apple entering a category it doesn't need to enter not just for the sake of entering it, but to take the space and turn it on its ear. There's a fine distinction between the two approaches. While an iPad Mini still doesn't make 100% sense to me, I appreciate a premium price tag on a superior product.

Ultimately, iPad Mini represents a bridge between the ultra-successful iPhone 5 launch and whatever's next.

Apple's September quarter could come in soft just like last quarter. The company will probably need to not just hit, but blow away holiday quarter iPhone and iPad numbers when it reports them in January 2013.

This is all short-term noise -- iPhone 5, iPad Mini, the Christmas shopping season. None of it matters vis-a-vis Apple's long-term narrative other than the extent to which these things influence the company's path to the next big, independent of Steve Jobs, product launch.

AAPL will trade on everything but that actual future until we get some meaningful color on it.

We'll get the now obligatory over- and under-reactions to earnings, rumors and this noise or that noise. But, not until Tim Cook takes the stage with something new will we have anything close to a handle on the veracity of $1,000-plus price targets for Apple's stock.

At the time of publication the author held no positions in any of the stocks mentioned.

This article is commentary by an independent contributor, separate from TheStreet's regular news coverage.
Rocco Pendola is a private investor with nearly 20 years experience in various forms of media, ranging from radio to print. His work has appeared in academic journals as well as dozens of online and offline publications. He uses his broad experience to help inform his coverage of the stock market, primarily in the technology, Internet and new media spaces. He has taken a long-term approach to investing, focusing on dividend-paying stocks, since he opened his first account as a teenager. Pendola, 37, is based in Santa Monica, Calif., where he lives with his wife and child.

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