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

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?