John Paczkowski

Recent Posts by John Paczkowski

iPad Mini a Fine Young Cannibal

Render by Martin Hajek

If Apple ships the smaller iPad it’s expected to debut next week in time for the holidays, it will almost certainly sell a bunch of them. Analysts predict December-quarter sales of the so-called iPad mini to range between five million and six million units, assuming a November 2 street date. But what does that mean for sales of the larger iPad?

Consensus seems to be that the original iPad will suffer some cannibalization by its smaller sibling. Piper Jaffray analyst Gene Munster figures Apple will sell 25 million iPads in December — of those, five million will be iPad Minis and 20 million will be iPads. Munster previously expected Apple to sell 21 million iPads, but he shaved a million off his estimate to account for consumers opting for the mini instead.

“We believe that the smaller iPad could cannibalize one million regular iPad units in December or a rate of cannibalization at 20 percent,” Munster said. “[So] for every five million smaller iPads, you lose one million standard iPads.”

That seems a reasonable prediction, though it’s a bit higher than some others I’ve seen. Janney Montgomery Scott’s Bill Choi, for example, expects a 7.85-inch iPad to cannibalize about 15 percent of standard iPad sales. Why the more modest figure? Choi takes a more accretive view of the iPad mini. “We view the smaller iPad as mostly an incremental opportunity, but see some modest cannibalization risk to the iPad and iPod touch,” he said.

For the December quarter, Choi expects Apple to sell 25.5 million iPads. Of those, he foresees six million being iPad minis, the overall total being offset by the cannibalization of one million standard iPad sales.


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