Analysts: Apple ‘iPad mini’ to cannibalize 15%-20% of iPad sales

“Apple’s iPad Mini will increase the company’s overall tablet sales, but will cause some potential buyers of Apple’s higher priced, regular iPads to buy the cheaper, smaller tablet instead,” Patrick Seitz reports for Investor’s Business Daily.

“In a research note Wednesday, Janney Capital Markets analyst Bill Choi said he expects 15% cannibalization to current iPad sales from the iPad Mini. Piper Jaffray analyst Gene Munster puts the cannibalization rate at 20%,” Seitz reports. “Apple is expected to unveil the iPad Mini at an event Tuesday in San Jose, Calif., near its headquarters in Cupertino. The smaller tablet is believed to have a 7.85-inch display vs. 9.7 inches for the regular iPad. Choi expects the iPad Mini to hit stores on Friday Nov. 2 and sell in the range of $299 to $399… Munster says Apple will sell the iPad Mini starting in the range of $249 to $299 to better compete with 7-inch tablets from Google and Amazon.com.

Read more in the full article here.

45 Comments

  1. Analysts are idiots. They forget that a lot of people will buy both. The iPad 3 is my mobile office. The iPad mini will be the perfect reader at home. And I am not the only one.

    1. iSheep are idiots and clearly you are an iSheep! Apple Sauce Inc. is a human rights abuser, enviro abuser and Chinese loving profit making machine with most employees belonging to the Church of Scientology and the Democratic Party.

  2. These freaking idiots always talk about cannibalization like it’s the same as self immolation. How much sales did the MacBook Air eat into the MacBook Pro? Conversely, how much sales did the original iPad eat into Mac sales?

    When you’re broadening and widening the product range, you float all boats. Fear of cannibalization is a Microsoftian trait because the opposite is true – if you fear to cannibalize your own sales, then you end up trying to defend your turf by churning out products that are an incremental iteration of the previous generation, much like Microsoft has tried to defend its lead in Windows and Office leading to lacklustre incremental upgrades or service packs.

    The adage that if you don’t eat into your own sales somebody else will holds true in this case. Apple is broadening the appeal of the iPad by extending its line to a more portable format, which will be a resounding success. Cannibalization be damned.

    1. “How much sales did the MacBook Air eat into the MacBook Pro?”
      answer: a lot

      “how much sales did the original iPad eat into Mac sales?”
      answer: a lot

      “When you’re broadening and widening the product range, you float all boats.”

      The first thing Steve Jobs did when he came back to Apple was to streamline the product line, to get the company back to profitability.

      I work in Apple retail/corporate sales. I see the cannibalization effect daily. It cuts into profit big time. I dread the thought of an iPad mini. It will take just a long to sell one yet result in half the profit margin (compared to an iPad). The iPads are already non profitable compared to a laptop and a MacBook Air is less profitable than a MacBook Pro (plus you can’t add memory or upgrade the hard drive in an AIr).

      BLN you’re entitled to your opinion, but you’re wrong. Again I see the cannibalization effect daily. I’ve got the experience to prove it. You don’t.

      1. Steve also disliked ‘sales bozo’s’

        Four words for why you are wrong: iTunes ecosystem, Halo Effect

        That is the problem with sales bozo’s, vision is usually limited to the either the current or next sale. You see margin on an individual transaction level. Step back.

        Apple wants consumer CC captures, it can market those (installed base) numbers to it’s advantage with developers, accessory makers, component suppliers. Once you buy one Apple product you buy more. Once it is simple and painless to use the one click store, you use it more.

        Apple is now generating many more transactions per card holder, selling to a greater variety of income levels and making you work harder for your jack. WIn Win for them.. What you see as cannibalism, they see as growth.

        BTW, Steve streamlined the product line because it was a confusing mess, todays lineup is no such thing. (well other than the lack of xserve, and the molasses like update speed of the mac pro line)

  3. Congratulations Patrick Seitz for going to math camp. You know what else eats into iPad sales? Other companies smaller tablets. A sale is a sale and everything around it is a bonus.

    1. This is not math, it is speculating on the future. If they have actual mathematical models, they still had to start with some assumptions that they manufactured.

      Your point about other companies sales is a very good one.

      We should also note that they are still expecting Apple’s overall tablet sales to increase.

  4. That is like saying the MacBook Air will cannibalize MacBook Pro sales – Really is that a problem? They will still make a tone of money and people that might not have purchased an iPad might buy an iPad Mini

  5. A 15% to 20% loss is really an 80% to 85% gain.

    It’s like if America attacked and took over Canada. Even though there were 3 million casualties, America gained 28 million in population, a whole pile of resources and a claim to the title of biggest country in the world.

  6. Yesterday one screen many windows.
    Today one ‘window’ many screens… Have more than 2 iPads it’s the new cool/must.
    1 iPhone… 4 iPads for me. thanx
    Is the mini the new iPod touch? Maybe cannibaliza the iPod touch… not the big iPad I guess.

  7. Canniballization? In your dream. The game is changed. 7inch market won’t even let apple happen because google, amazon already dominate with high spec and lower price. iPad mini is just a joke. Who will buy non retina display iPad mini with terrible resolution? 8GB will be $250? Wrong. iPod touch users will complain about it. It is a wrong decision, and wrong time. Apple will never be successful in this market.

    1. Is that a prayer… Apple will dominate that market as it did the full size.. It’s the ecosystem Eddie… The ecosystem you bonehead…. You keep worrying and talking specs… Have you learned nothing you ignorant illiterate geek…. Now repeat after me… It’s the ecosystem… Once more…. That’s it…. Keep repeating till it sticks….

    2. It depends on what you consider market success. What do you consider success? High unit sales or high profits? From the get-go Apple will generate the highest profits because they have the largest economies of scale and the most loyal customers who’ll buy the iPad Mini just because there’s an Apple logo on it. I think that if Apple is willing to sacrifice a pawn (iPad Mini) to protect the king (iPad 9.7″) it’s worth the gamble.

      Contrary to what anyone says about Apple being at a disadvantage, Apple is sitting in the driver’s seat when it comes to tablets. Rather than individual tablet specs, Apple has command of the component supply chain and can afford to make the biggest deals thanks to a huge cash reserve. Apple is taking less of a risk introducing the iPad Mini than Microsoft is with the ZunePad. Windows tablets have always seen low volume sales. Who’s to say the ZunePad won’t be any different?

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