Analysts estimate the iPad mini could cannibalize one-fifth of current iPad sales

By , Oct 18, 2012

The rumored iPad mini, expected to be introduced by Apple next Tuesday, could eat into up to twenty percent of sales of regular-sized iPads, analysts said Thursday. Such cannibalization caused one high-profile Wall Street Apple watcher to trim one million units from his sales projection for the December quarter.

“We believe that the smaller iPad could cannibalize one million regular iPad units in December or a rate of cannibalization at twenty percent”, Piper Jaffray analyst Gene Munster told investors. In other words, for every five million iPad minis sold, deduct one million sales of the original iPad…

Per AllThingsD, Munster overall expects Apple will sell 25 million iPads for the December quarter – five million iPad minis and 20 million standard-sized iPads. He had initially forecast sales of 21 million regular iPads, but reduced the projection based on his belief some consumers will opt instead for the iPad mini.

Another analyst agrees with Munster, but believes the iPad mini will take a slightly smaller bite from sales of the larger iPad.

Bill Choi of Janney Montgomery Scott projects a smaller iPad will cut into fifteen percent of the larger iPad’s sales. In contrast to Munster, Choi sees a “modest cannibalization risk,” viewing the iPad mini as more incremental than evolutionary.

Choi forecasts 25.5 million in total iPad sales for the December quarter – six million of those iPad minis causing one million fewer purchases of the standard iPad.

This isn’t the first time we’ve heard of one Apple device potentially reducing demand for another device produced by the Cupertino, California company.

There was some concern that the original iPad could reduce demand for Macs.

In reality, what tends to more often happen is that purchasing one Apple device encourages consumers to build a family of Apple products. For instance, I know of one person who bought an iPhone, liked the product so much that they purchased an iPad. Those purchases then spurred the acquisition of an iMac.

We shouldn’t be overly concerned about one Apple device cutting into sales of another Apple device.

This is like worry whether one dollar goes into your left pocket instead of your right pocket. The real concern about cannibalization should be on the part of PC makers, seeing demand for desktops and laptops dropping in the face of growing tablet use.

Makers of small form-factor tablets should be concerned that the iPad mini will eat into their profit now derived by the simple fact that Apple has yet to release a smaller iPad.

What’s your opinion?

Will increased demand for the iPad mini hurt Apple – or its competitors?

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  • http://www.facebook.com/profile.php?id=604885391 Richard Borkovec

    Honestly, it’s all going to depend on the price and actual hardware. If it’s basically a bigger 3GS set at $299, I don’t think it’ll eat that much up. Might as well spend the extra 100 for the iPad 2 and get double the storage.

    • http://twitter.com/FootStepsOfTobi Justine Tobi Dayao

      correct!

  • CollegiateLad

    You lost me at analysts.

  • http://www.facebook.com/jamie.tilden.9 Jamie Tilden

    Am I right in predicting that the new iTunes will be released alongside the iPad Mini? Or might it be released alongside Tuesday’s announcement?

  • http://twitter.com/alexx1291 Cazz

    Def excited for both new iTunes and Mini.

  • Gary McCray

    Depends on pricing, if the Mini’s various models are priced favorably most Minis will go into the hands of not previously Apple customers looking for a 7″ tablet.

    If the various incarnations are priced too closely to the equivalent full sized IPad’s most Minis will go to existing Apple customers and the main competition will be the the full sized IPad(s) and not favorably.

    Apple’s pricing is spectacularly important for the Mini and right now it is not at all clear that Apple is going to get it right.

  • http://www.facebook.com/LethoeshatedadedicatedfatherGreen Keith Green

    It won’t hurt it. I originally bought a used iPhone 3G I used it on wifi only cuz I already had a phone and was waiting on Verizon to get the iPhone. I loved it so much!!!! When Verizon finally got the iPhone I bought the 4, 4S, and 5. I also bought a Mac Mini and an ATV2. I want an iPad and a MacBook. One u have one it just makes u want more. Their products r so well put together, software & hardware. There is just no turning back. Depending on the price (and if it has retina display) I might buy an iPad mini and then buy an iPad 4 next yr.