Analyst: iPad mini may be cannibalizing 9.7-inch iPad, iPhone 5 demand strong

“Demand for the iPhone 5 remains strong as supply and yields continue to improve, but total iPad sales for the holiday quarter may prove lower than market watchers expect, as the iPad mini cannibalizes sales of the new fourth-generation iPad,” Neil Hughes reports for AppleInsider.

Analyst Shaw Wu of Sterne Agee “has increased his iPhone forecast to 47.5 million for the holiday quarter, up from a previous prediction of 47.3 million,” Hughes reports. “As for the iPad, Wu has reduced his projected sales from 25 million to 23.5 million.”

Hughes reports, “Wu has cut his iPad sales projection because of continued constraints on iPad mini supply, and lower build orders for the fourth-generation iPad. Sales of the full-size 9.7-inch iPad may be slower than expected, Wu said, because of some cannibalization from the smaller and less expensive iPad mini.”

Read more in the full article here.

39 Comments

    1. Eh I don’t know if I can agree. They are (surprisingly) two very different devices.
      The mini is great for kids & students and for an ebook reader, but for general web surfing, magazines, games and many apps (particularly control dense & graphics apps) the 9.7″ iPad is most decidedly a better product.
      That the 9.7″ would loose some sales (who would have wanted a smaller size but would have settled for the larger iPad rather than a ‘roid crap tab) is inevitable, but that doesn’t mean the 7.9 has eclipsed the 9.7 for the majority of users.

  1. Doh

    There will be those that prefer the mini over the standard size and will buy that now it is available.
    My wife already has an ipad3 but I will be getting a mini this Christmas. Not really cannablization in this case since I probably would not have bought a full sized iPad. I already have a rMBP and iPhone so the mini fits nicely as a reading device.

  2. And this is bad?

    No, it’s not. It would be bad if sales were being eaten away by competitors. Jobs himself said Apple strives to cannibalize their own sales, because that’s significantly better than the alternative.

    1. iPad mini margins are less then the iPad. iPad mini will obviously cannibalize sales from iPad. Those are obvious facts. But perhaps there will be enough iPad mini sales to somehow make up the difference? Time will tell. Besides, Derek Currie said there would be no iPad mini. So this article is moot.

  3. In no way are iPad mini sales eating into iPad sales. If anything the mini is supplementing iPad sales by broadening and deepening the pool of people able to afford an iPad and bringing them into the Apple ecosystem. That, in itself, is no bad thing.

    More iOS devices sales mean more interest expressed by developers to create new and interesting apps for the platform.

    1. Exactly, I LOVE my iPad 3 9.7″ but would also like the iPad Mini as an option depending on the situation. I suspect I am not alone. So if anything a lot of people will be doubling up on devices. Also if you just like Apple devices in general why not have both? I am waiting though for a RD version of the iPad Mini. RD has become my (spoiled) minimum display standard.

    2. Not true BLN. I work in Apple retail. Never have I ever seen any one product have such a dramatic cannibalization effect. Everyone want the cheapest model $329. There is a great shortage worldwide for this model. People are calling in all day long for it. There are plenty of $429 models available, but very few people are purchasing them, nor are the turning to full sized iPads.
      I have never seen any product they was so price sensitive.
      Time will tell. I like the mini, except the non Retina display. From a sales perspective it has been a nightmare.

  4. Why do we never see this “argument” applied to any other industry? When last did you hear that the BMW 3 series was “cannibalizing” the 5 series? Come to think of it, how often do you see it applied to any electronics maker but Apple?

    File under “kinds of problem every other company in the world only wish they had”.

    1. It’s a very real phenomenon that’s factored into almost every new product launch. It’s especially relevant in cars because there are a fairly large number of consumers who are loyal to each brand.

      Introduce a lower-end Porsche and a percentage of that loyal consumer base will buy it as a cheaper way to own that next (or first) Porsche they wanted. The 3-series certainly steels sales from the 5-series. And they do fret over it.

      The trick, as with other product categories, is to sell so many more of the cheaper models, to more than off-set the canibalization. And Apple is a master of this.

      1. I view it more as a stepladder. If you put the bottom rung within easy reach by selling a cheaper alternative, then you attract more buyers into your brand. Once these buyers are hooked into your ecosystem, leaving it will be very difficult, especially if you have a lot of money invested in apps. And as you grow your income, you will want to move up to the next step in the ladder which is the full scale iPad because you can reinstall those apps in the larger iPad without paying for them twice.

        As far as Apple is concerned, attracting new buyers lower down the scale, such as students and kids, only mean that when they grow up to be responsible adults, they will look no further than Apple to fulfil their computing needs.

    1. With so many product lines now, and what looks like 6-month product cycles, I don’t think Apple is expecting anyone to buy each new model that’s launched.

      We left that idea behind on the Mac side back in 1987.

  5. I got a mini and sold my iPad 3 with the intention of getting a 4, but since getting the mini, I can’t see me ever getting a bigger iPad until the weight and thinnes of the larger iPad come in line with the mini.

    Anyways, I ended up getting a MacBook Air 11″ as replacement for a 13″ MacBook Pro I gave to my nephew. Portability is bliss, specially when one has a 27″ i7 iMac, soon to be replaced by the new model with fusion drive, at home.

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