iPad Shipments Lowered Because of iPad Mini Cannibalization?

[MacRumors]

Sterne Agee's Shaw Wu has issued a new report on Apple, raising his iPhone unit estimates while lowering iPad estimates reports Apple 2.0. Additionally, Wu has cut his revenue estimates slightly while increasing his gross margin estimates for Apple's holiday quarter.

Wu says iPad mini demand is strong but sales are limited by supply constraints and he sees the mini cannibalizing full-sized iPad sales. iPhone sales will grow because of improving manufacturing yields and increased availability.

We believe AAPL shares will likely continue to be volatile until year end due to non-fundamental factors including profit taking as AAPL as been an outstanding performer in 2012 where many are opting to lock in gains and fears of higher "fiscal cliff" tax rates next year. However, we believe as we enter 2013, investor sentiment will likely shift back to fundamentals. We are at the beginning of two big product cycles that will likely last 3-5 quarters and see margins poised to improve with greater scale and improving yields.

Article Link: iPad Shipments Lowered Because of iPad Mini Cannibalization?

 

[JGIGS]

Duh, Of course the mini is going to canibalize regular ipad sales. Just like releasing any new different sized or optioned model of product would do.

 

[gnasher729]

Duh, Of course the mini is going to canibalize regular ipad sales. Just like releasing any new different sized or optioned model of product would do.

There was a rumour that the next iPhone comes in six different colours. I bet that will cannibalise sales of black iPhones and white iPhones.

 

[gmanist1000]

Better to be cannibalized by your own products.

This happened with iPod nano, and the iPod mini as well.

 

[blackburn]

What about the iPod touch? The new gen 32 gigs price is almost the same as the iPad mini. I haven't seen any the new iPods in circulation yet.

 

[WhoDaKat]

As long as they stay in or become part of the eco-system, Apple is satisfied. They know people like me will get all my content in one place and not want to move it.

 

[qtrim]

What a dumb observation. That like saying 6ft bed Ford F-150's are cannibalizing the 8ft bed versions. Who cares?

 

[The Bulge]

iPad sales cannibalized by iPad. Oh MY GOD.

 

[teknikal90]

What a dumb observation. That like saying 6ft bed Ford F-150's are cannibalizing the 8ft bed versions. Who cares?

why don't you guys get it??
8 foot beds cost more than a 6 foot bed.
iPad mini has a lower profit margin than a full size ipad. Of course people would care.

 

[pgiguere1]

In other news, the MacBook Pro sales are cannibalized by Retina MacBook Pro sales.

 

[angrynstupid]

Thanks for stating the obvious

Of course the mini is going to cannibalize iPad sales. That's like saying the white iPhone is going to cannibalize black iPhone sales.

 

[0029937]

Funny watching people not read the comments before they post and then go on to say practically the same thing that's been said 10 times before.

 

[ArtOfWarfare]

I, for one, am interested in the iPad mini but wasn't ever interested in the full sized iPad. I feel like the mini could make a great ereader... Now if only iBooks contained any of the textbooks I need for school, I might get one.

My point is, not every sell of an iPad mini means one fewer full sized iPad sell.

 

[Patriks7]

I'm not sure whether this is actually serious or it's magically April 1st?

 

[kas23]

We knew this would happen. Not many people were going to buy a Mini in addition to the iPad 4 they just bought.

That said, I don't if this is a problem or not. According to this, the profit margins of the Mini are smaller than the regular iPad:

http://tech2.in.com/news/tablets/ipad-mini-teardown-apple-making-lower-profit-on-base-model/563432

But, this says they are about the same as the regular iPad.

http://www.computerworld.com/s/article/9233273/Apple_s_iPad_Mini_margins_run_between_40_and_55_

 

[Capt Underpants]

Of course the mini is going to cannibalize iPad sales. That's like saying the white iPhone is going to cannibalize black iPhone sales.

No it's not.

As stated before, Apple's margins on iPad mini are lower than on iPad. So cannibalization of the iPad by iPad Mini = less profit for Apple, and potentially unhappy investors.

 

[The Bulge]

No it's not.

As stated before, Apple's margins on iPad mini are lower than on iPad. So cannibalization of the iPad by iPad Mini = less profit for Apple, and potentially unhappy investors.

That's only true if sale of a regular sized ( ) iPad is replaced by a sale of iPad Mini ( which we have no proof for or against), but i doubt it's the case. I think Apple is selling way more iPad Minis.

 

[lowbatteries]

Better to be cannibalized by your own products.

This happened with iPod nano, and the iPod mini as well.

Well, you can't really be cannibalized by other people's products, can you?

----------

That's only true if sale of a regular sized ( ) iPad is replaced by a sale of iPad Mini ( which we have no proof for or against), but i doubt it's the case. I think Apple is selling way more iPad Minis.

This is what is meant by cannibalization. People buying the iPad Mini instead of an established product from the same manufacturer.

Most companies try not to do this, but I really don't think Apple cares much. I'm sure they'd prefer everyone bought an iPad and an iPad mini, but it's more important that you buy any iPad instead of a Kindle/Nexus.

 

[gnasher729]

No it's not.

As stated before, Apple's margins on iPad mini are lower than on iPad. So cannibalization of the iPad by iPad Mini = less profit for Apple, and potentially unhappy investors.

"If you don't cannibalise your own products, someone else will". Don't know exactly who said it.

 

[nagromme]

Cannibalization beats predation any day.

The 8” Mini will outsell the 10" iPad going forward I believe. I tried one and am convinced. The screen width/height are over 80% as big as the full iPad, which just doesn’t feel that much different. Not cramped the way I’d feared. But the DEVICE still does feel super small and light. That’s a great combination. (And much better than a 7” plastic device that is super narrow in portrait mode—yet bulkier!)

 

[The Bulge]

Well, you can't really be cannibalized by other people's products, can you?

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This is what is meant by cannibalization. People buying the iPad Mini instead of an established product from the same manufacturer.

If the bottom line stays the same or even gets better i really don't know why that would be a problem.

 

[Gasu E.]

There was a rumour that the next iPhone comes in six different colours. I bet that will cannibalise sales of black iPhones and white iPhones.

Not comparable, as the colors will not impact gross margins.

 

[teknikal90]

"If you don't cannibalise your own products, someone else will". Don't know exactly who said it.

That quote was said in context of new innovative products, not so much cost cutting.

cannibalize yourself by introducing better products. sure. iPhone > iPod. This is good.
but introducing a cheaper iPad to cannibalize a more profitable iPad?

 

[dampfnudel]

There would be even more iPad mini cannibalization if it had a retina display. Wait until next year. The iPad 5 better be a half pound lighter with a smaller bezel to get rid of that bulk.

 

[Chip NoVaMac]

Funny watching people not read the comments before they post and then go on to say practically the same thing that's been said 10 times before.

Amen!

Yes, the mini cuts in to regular iPad sales... Yet iPhone 5 yields are higher so revenue is cut "slightly" while gross margins will increase...

Captain Obvious where are you?