“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.
They have no idea. Numbers, numbers. All anybody can really say is Apple is introducing something .
Who cares about the 15% iPad sales? What about the 80% Kindle, Surface and Nook sales?
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.
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.
Go away, dumb-ass troll.
The dumbest people on the planet use that incredibly tired and disingenuous tech cliche “iSheep” having not a shred of original thought. This guy is a raving loon who plainly has no friends and no where to go.
Perhaps the thing that matters – if overall numbers increase, is what margins on the iPad mini will be.
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.
BLN…Sometimes you are wise!
Steve Jobs agreed with you.
“If you don’t canabilize your own sales, someone else will.” – Steve Jobs
“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.
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)
I heard this all before with iPod mini…
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.
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.
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
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.
I like that idea.
No you won’t. It’s f***ing cold up here and you guys would leave as soon as you could get your trucks unstuck.
lolol, okay okay
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.
Yes , iPod touch, we were planning. on deploying 36 iPod touch for our amber POS system, waiting to see if we meet our price point of $299.00, hoping for $249
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.
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….
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?
“(E)edward”- you back? We missed you (not)!
STFU and go away (again).
are you trolling?
Edward, I have recorded your comment to make fun of at a later date.
It’s not an 80% gain in sales. Think about it again.
No matter what Apple does, these pundits make it seem like Apple is hurting itself. Nobody knows for certain how much cannibalization will be taking place. iPad Minis may just reach another part of the population or allow consumers to have two Apple devices instead of one. On one hand these pundits are complaining that you don’t get enough choice from Apple which harms the company. Then when Apple widens the choice, they’re complaining about overlapping products causing cannibalization which will harm the company. As long as money is flowing into Apple with the proper profit margins set, Apple will do very well financially.
I don’t see Apple’s product line-up being too large as it is. Wall Street is always complaining about how Apple derives too much revenue from the iPhone alone, so I’d think it would be advantageous for Apple to spread the revenue responsibility over several products. I’m hoping the iPad Mini will reach schools and small businesses that aren’t already using iPads and that is certainly a sound possibility.
Ipad cannibalize iPad, not sure.
Sure that Kindles will be shelves much longer
The right analysis is, how many net sales gained over not introducing the product? This would be the total of (total sales)-(sales of Minis INSTEAD OF full iPad). I suspect number of people getting Minis INSTEAD OF full iPads is much smaller than the number of people getting Minis IN ADDITION TO full IPads. This number is big.
I guess my first reaction is; So What?
By any metric the iPad is selling (and making big profits) in a way that puts every other consumer product (not made by Apple) to shame. If you know of a more successful/profitable product in the market today (not made by Apple), chime in.
If Apple loses a few % points on the iPad due to self inflicted cannibalism, it will still be a monstrously successful/profitable product. So again; So what?
The iPad mini will be a huge success and stuff even more currency into Apple’s war-chest.
The only losers in the launch of a iPad mini will be the folks that make competing small tablets.
Finding the dark lining in the silver cloud.
Reblogged this on Apple Video Reviews – The Apple Product Review Directory.
Go away. You’re annoying! No one is paying attention.
cannibalization is the zero sum game fallacy.
and what percentage of Kindle sales will it Carnivorize?
Oh, Competition, yummy!
AND they are not factoring in all the iPad owners who will also buy a mini. I will not buy a second ipad but will buy a mini. That is not cannibalizing iPad sales.
Sh*t, I’ll be buying three of them, one for me, my wife and my kid. Think Apple will be happy with that…
People will buy the one that fits their needs. And if someone wanted or needed a smaller less expensive iPad, well now they have that choice instead of having an Android tab as the only alternative. Cannibalize Android certainly.
Its a win for Apple anyway you cut it. And when Apple sells millions of iPad minis at a profit, how long will Android tabs be able to sold at a loss? It’s not a sustainable strategy.
When you eat beef steak you are not being a cannibal, you’re being a carnivore.
iPad will be a carnivore when it comes to Android tablets.
I have an iPad (actually 3), but will also buy the iPad mini for use in my car and truck. Will have an installer put in car stereo system using the iPad mini as the head unit.
See Youtube of Fishman and his SUV installs. So COOL.
So I don’t think that the iPad market has reached its limit yet. As new iterations come out people and corporations will find more and more uses for each of the sizes.
I am not the least bit concerned about the iPad mini, canibalizinf iPad sales. Each one will lead to sales of the other.
It is not hard to imagine buyers who like the ipad idea but didn’t want to layout the full price for iPad. So some will get the mini, be happy with it and conclude that they like it, but sometimes a larger scrrened iPad could really be useful and they buy.
Those who enjoy the larger iPad may conversly conclude that the mini may be great because of it’s easier portability.
The iPad bottom line will grow
Next up Ipad with a laptop sized screen that will provide more options and will attract those for whom a larger screen will be a plus. I won’t worry about canibalization then either. I will enjoy the bottom line increase.
This article has a real weird take on mini cannibalization:
http://beta.fool.com/jaans/2012/10/17/understanding-apple-ipad-mini-which-cannibal/14716/