John Paczkowski

Recent Posts by John Paczkowski

iPad Mini “The Next Big Thing” in China

Mini_sideviewIf there was minimal consumer turnout for the iPad mini’s debut in China, it wasn’t for lack of interest. Demand for the device in the world’s most populous country appears as high there as it is any other market.

Topeka analyst Brian White says his checks in Hong Kong and China indicate “insatiable” demand for the iPad mini, which launched in those countries in early November and December, respectively. Nearly all models of the diminutive iPad sold out in Hong Kong and China last week, with sources at Apple’s three retail stores in Hong Kong and eight in China reporting stock-outs or significantly constrained supply.

Says White, “Similar to Hong Kong, we are being told by contacts in China that the iPad mini is already more popular than the fourth-generation iPad.”

And that’s a point well worth noting. Because it’s clear proof of three things:

  • The 7.9-inch form factor Apple settled on for the iPad mini is obviously a hit with consumers.
  • While the iPad mini’s price may be too heady for some cost-conscious shoppers, it’s clearly not hamstringing sales. Apple predicted that consumers would be excited about the mini at $329, and it was right. (See “Apple Doesn’t Need a $200 iPad Mini.”)
  • As Apple ramps up production of the device, it will only gather more momentum in China, and other markets as well.

“Prior to the China launch, we indicated that the iPad mini would be the ‘next big thing in China,’ and we believe this phenomenon is starting to develop,” says White. “In our view, the smaller form factor and lower price point will allow Apple to sell the iPad mini in more meaningful volumes versus the regular-size iPad.”

Now, that might have some effect on sales of the iPad. But as I’ve noted here before, analysts are pretty sure that the iPad mini creates more demand than it cannibalizes. So, in China and Hong Kong, as elsewhere in the world, Apple really does appear to be plugging into a largely untapped market that has been waiting for precisely the device the company is now offering. And that obviously bodes well for the iPad business overall, particularly given the mini’s margins. They may be smaller than the full-sized iPad, but they still range from 35 percent to 56 percent.

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Another gadget you don’t really need. Will not work once you get it home. New model out in 4 weeks. Battery life is too short to be of any use.

— From the fact sheet for a fake product entitled Useless Plasticbox 1.2 (an actual empty plastic box) placed in L.A.-area Best Buy stores by an artist called Plastic Jesus