iPad Mini outselling iPad 2 to 1

[xofruitcake]

I. It won't happen. I'm not sure what will be released in the first 1/2 of next year, but new iPads won't happen. Of that, I'm certain.

Don't bet on it. It all depend on how fast technology move. We seems to forget that Apple is a technology driven company and even though it do well, it does not have a monopoly in any space. If IGZO technology can cut down power and improve display to the point that it improve the size and weight of an Ipad 5, you will see it in April or May (or whenever it is ready). What good does it do to Apple after they spend tons of money to get their hand on new technology before any one else but no product to ship them?

The once a year product cycle work in the past because component and system technology moved too slow to have multiple releases a year. But given the size of mobile market, there are tons of money invested in the space now and technology are moving much fast than a few years ago. Qcom just announced a low power version of NFC chip. Should Apple ship a new Iphone with NFC in March if it is ready (hypothetically) or wait until Sept next year? I think we need to get use to non-standard upgrade cycle for all idevice. It is a good thing for users.

 

[TJ5921]

Because it's simply better!

 

[Medic311]

After several years of istuff, we still have four kinds of iPods. The iPod small, the iPod with cellular, the Medium iPod, and the Large iPod.

so true

or as steve called the iphone - "internet communicator + ipod + phone" LOL

 

[AdonisSMU]

Yes, really.

Go to Apple's website if you think those prices aren't right.

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LOL smaller does not equal better.

Portability does not equal better.

It depends...

 

[WilliamLondon]

Don't bet on it. It all depend on how fast technology move....What good does it do to Apple after they spend tons of money to get their hand on new technology before any one else but no product to ship them?

The once a year product cycle work in the past because component and system technology moved too slow to have multiple releases a year.

No, that's not at all the reason for the duration of their product refreshes - it's all about their product and business strategy. There is a cost associated with each new feature or technology, a cost to research and a cost to implement. When you spread that cost across more units, the price per unit of that cost is less, and that figures into Apple's big focus: profit margin. If you now halve the number of units to spread that cost across, one of two things will happen: cost per unit goes up, so either Apple's profit margin goes down, or prices to the consumer goes up. Which do you think is going to happen?

Apple keeps its product lines simple - few choices, long refresh durations. This business strategy creates a simplified supply chain and that keeps costs down. Each new refresh that makes changes (minimal to significant) also means the whole production line must change, and that means more costs. Launching a product means lots of marketing spend (big cost again). You get the idea but what I'm trying to tell you is that refreshing a product costs companies lots of money, and that's why Apple isn't going to change the refresh cycle.

 

[SeanR1]

You get the idea but what I'm trying to tell you is that refreshing a product costs companies lots of money, and that's why Apple isn't going to change the refresh cycle.

But they just got done doing exactly that.

 

[WilliamLondon]

But they just got done doing exactly that.

You've plucked out one sentence from a long exchange (which has actually spilled over into several other threads! or this may be the spillover, can't remember<grin>) on which to comment, so not really sure what it is you're saying.

 

[SeanR1]

You've plucked out one sentence from a long exchange (which has actually spilled over into several other threads! or this may be the spillover, can't remember<grin>) on which to comment, so not really sure what it is you're saying.

Sorry, that part caught my eye and didn't make sense to me given recent events. I didn't mean to mess up you long exchange.

 

[WilliamLondon]

Sorry, that part caught my eye and didn't make sense to me given recent events. I didn't mean to mess up you long exchange.

Please don't think I'm trying to dissuade you from commenting or joining (always welcome additions to the conversation, nothing private here), I'm probably just being thick, but I didn't understand.

My point regarding refresh cycles was that Apple has reset it, but they didn't change it, meaning that this last launch and upgrade to the full sized iPad was anomalous and we shouldn't expect another upgrade in 6 months. It's incredibly costly to launch a product (new or upgrade), and I can't imagine the upside to a new dock connector would be adequate justification (as some here suggest) to eat the costs of launching a new version of a product.

 

[SeanR1]

Please don't think I'm trying to dissuade you from commenting or joining (always welcome additions to the conversation, nothing private here), I'm probably just being thick, but I didn't understand.

My point regarding refresh cycles was that Apple has reset it, but they didn't change it, meaning that this last launch and upgrade to the full sized iPad was anomalous and we shouldn't expect another upgrade in 6 months. It's incredibly costly to launch a product (new or upgrade), and I can't imagine the upside to a new dock connector would be adequate justification (as some here suggest) to eat the costs of launching a new version of a product.

Cool, I understand what you meant now. I had it in my head that they were switching to faster cycles. Thanks for clearing it up for me.

 

[xofruitcake]

No, that's not at all the reason for the duration of their product refreshes - it's all about their product and business strategy. There is a cost associated with each new feature or technology, a cost to research and a cost to implement. When you spread that cost across more units, the price per unit of that cost is less, and that figures into Apple's big focus: profit margin. If you now halve the number of units to spread that cost across, one of two things will happen: cost per unit goes up, so either Apple's profit margin goes down, or prices to the consumer goes up. Which do you think is going to happen?

Apple keeps its product lines simple - few choices, long refresh durations. This business strategy creates a simplified supply chain and that keeps costs down. Each new refresh that makes changes (minimal to significant) also means the whole production line must change, and that means more costs. Launching a product means lots of marketing spend (big cost again). You get the idea but what I'm trying to tell you is that refreshing a product costs companies lots of money, and that's why Apple isn't going to change the refresh cycle.

It sound all good until the competitor start to eat your cake. Why would Apple price the Ipad and Ipad mini so aggressively and update Ipad 4 now instead of wait for another 6 months? Every business want to maximize their profit but there is limitation on what they can do. Iphone has 50-60% gross margin, Ipad 3 has 23-32% gross margin and Ipad min at best has high teen gross margin (Samsung trial document + last Q Apple earning call Q&A). Nexus 7, Nexus 10, Kindle Fire HD, NOOK etc is forcing Apple's hand on the tablet side. Samsung, HTC etc is forcing Apple's hand in smartphone side. Apple has grabbed most of the profit in the industry but it's market share is getting smaller and smaller. At some point the smaller market share will impact the ecosystem. And the premium device status hinge on the fact that Apple has the latest technology. How do Apple maintain the premium pricing if it had older technology consistently when compare to competitor? You can see the big dip in Iphone sales in 2Q12 and 3Q12 as a proof that old technology won't sell much even if it has Apple name on it. Didn't S3 outsell Iphone in 2Q12 or 3Q12? But Iphone 5 will outsell everything else in 4Q12?

 

[kodeman53]

You can see the big dip in Iphone sales in 2Q12 and 3Q12 as a proof that old technology won't sell much even if it has Apple name on it.

Sales of current models decline as the availability date of the new model approaches. Could that be why iPhone sales dipped in 3Q12? Nah.

 

[Dmunjal]

Sales of current models decline as the availability date of the new model approaches. Could that be why iPhone sales dipped in 3Q12? Nah.

Forget about quarterly trends and focus on the annual trends which are undeniably in Android's favor.

Apple will be fine as long as the market continues to grow rapidly. They can continue to grow profits even with a declining share.

The problem comes when the market growth slows and you have to find a new market.

 

[maxosx]

Don't bet on it. It all depend on how fast technology move. We seems to forget that Apple is a technology driven company and even though it do well, it does not have a monopoly in any space.

Apple has migrated to being a high gross profit company first, the mini is proof of that. While not a criticism, the mini is built with old technology to accomplish two goals, both directly about profit. First, using cheap old tech like its low resolution display, the profit per unit is high. Second, it gives Apple room to update it to the latest tech & charge more in the process. Apples position at the top of the heap proves they can easily generate fat margins better than any other company.

 

[WilliamLondon]

Every business want to maximize their profit but there is limitation on what they can do.

Great attitude if you want to work for a commodity company.

Apple's year on year sales are increasing, meaning Apple's high profit margins are making them way more money than anyone else, meaning the ecosystem is increasing its user base, meaning developers can make more money selling to Apple customers, meaning the supply of products in the ecosystem is going to continue to rise in quantity (and most likely quality as they have competition amongst developers).

Apple is in a great position, especially compared to the list of companies which look to others for direction and innovation. I don't mean to imply Apple can rest on its laurels, but the market in which you foresee Apple competing and the one in which I foresee Apple competing are as different as night and day, or as different as commodities and premium products.

 

[Piccio]

iPad Retina is not selling well, considering that 9,7 inches iPad is on stock instead of the Mini that is quite scarce everywhere...

 

[mantan]

Forget about quarterly trends and focus on the annual trends which are undeniably in Android's favor.

Apple will be fine as long as the market continues to grow rapidly. They can continue to grow profits even with a declining share.

The problem comes when the market growth slows and you have to find a new market.

That's the bigger issue. Apple has to feed the sales/revenue monster. That requires continuing to come out with the 'next big thing'.

Smartphones fit the bill nicely because people roll of their contract and are looking for something new.

iPads were a totally new sector...and the Mini moved into the smaller tablet space they had previously neglected. But what's next? What's going to entice buyers to buy the 'next great tablet' in 12-18 months. I think you are seeing that now with the iPad 4. The early adopters will always buy what comes out...but there are a lot of people perfectly happy with their iPad 2 who may not be looking to buy for another 2-3 years. People are fine spending $200 every 2 years. But are they going to spend $500-$800 on a full size iPad every 2 years without a really compelling feature?

 

[SeanR1]

That's the bigger issue. Apple has to feed the sales/revenue monster. That requires continuing to come out with the 'next big thing'.

Smartphones fit the bill nicely because people roll of their contract and are looking for something new.

iPads were a totally new sector...and the Mini moved into the smaller tablet space they had previously neglected. But what's next? What's going to entice buyers to buy the 'next great tablet' in 12-18 months. I think you are seeing that now with the iPad 4. The early adopters will always buy what comes out...but there are a lot of people perfectly happy with their iPad 2 who may not be looking to buy for another 2-3 years. People are fine spending $200 every 2 years. But are they going to spend $500-$800 on a full size iPad every 2 years without a really compelling feature?

I think they will handle that by keeping out the best new features in IOS for only the newest tablet model. I also believe they will do something in the next IOS update to make the iPad 2 more unattractive (slow it down).

 

[Steviejobz]

I love my mini. Unless the full-size ipad does something truly unique, I have no need for larger and overweight form factor again.

For those that use the iPad in lieu of a laptop, I could understand the slightly larger screen but otherwise the Mini is perfect.

 

[panzer06]

Apple could keep a Spring iPad update schedule. The iPad 4 release was probably just to unify the lightning connector across the major iOS products. I really like the smaller form factor for reading books but for web browsing and document editing I still like the full size version. If they release a retina version mini I will probably add it to my collection rather than replace my ipad 3.

Cheers,

 

[JTyler82]

As someone who's owned an iPad since the first gen, I find the mini to be that sweet spot. Usually I'm only browsing the Internet or reading Ebooks on my tablet and even with the 9.7 it felt a little too cumbersome for that.

Yesterday I just happened to be at a best buy when they got a shipment in, and decided to pull the trigger on one. Couldn't be happier. I understand why it was the top holiday gift this year

 

[palpatine]

iPad Retina is not selling well, considering that 9,7 inches iPad is on stock instead of the Mini that is quite scarce everywhere...

By the same logic, the scarcity of Microsoft Surfaces when they came out, or Asus Primes must have meant they sold well, right

We don't have numbers, which is why the whole premise of this thread is as insubstantial as the hot air blowing from my buttocks. We don't know how many Minis Apple produced, how many they shipped (holding back to drive up demand?), or how many they've sold.

They are in stock at every store I have visited, by the way, and people are flocking around the retina Macbooks and iPhones more than the Minis, from what I can see. In other words, it is all anecdotal evidence. Heck, people were saying the Mini sold poorly because there were no lines in China, but now they say it is selling well. You have to dig into the story at each store (in China, I believe the riots in earlier years led to more pre-orders and a reservation system, but I could be wrong). Even then, it would only give you a tiny snapshot.

My guess? Apple refreshed the 4 to lock up Christmas sales ahead of the Surface and Nexus launches. The Mini was rushed into production without retina to deal with the Kindle and smaller Nexus. I think 2013 will see the Mini get a nice update for the screen and processor, and the 5 will get a new body makeover with (possibly) a camera and RAM bump. The large iPad is a strong market, but probably not a high growth one at this point, because millions of 3s with essentially the same screen and performance are already in our hands. I would expect some decline in sales until a major change is introduced,

Declaring the death of the iPad, which some forum members are wont to do when they gush about the Mini, is to mistake one addition to a product line (basically, small, medium, and large iPods) for the entire line.

 

[WilliamLondon]

Apple refreshed the 4 to lock up Christmas sales ahead of the Surface and Nexus launches. The Mini was rushed into production without retina to deal with the Kindle and smaller Nexus.

You and I see things very differently. Here's my take:

The iPad 3 was already fresh, just 6 months old, no one would have declared it old technology or not able to compete or sell well just before Christmas (especially because everyone was quite surprised when they refreshed it), and most people don't buy based on specs, except a few tech-oriented folks on forums like this one. The dock connector is not a reason to upgrade a device (or to buy one), especially when they could roll it into the normal upgrade of the device in a few short months - there is no big consumer benefit that makes it a compelling reason to upgrade a device (as many here attest daily, they are keeping their iPad 3s), and take a hit with the HUGE costs associated with upgrading and launching a new device into the market (R&D are not the only costs associated with product launches). So, it has to be some other reason they upgraded the device, and the logical conclusion is that they refreshed it to reset the yearly upgrade cycle to coincide with the mini launch (which is going to be a yearly refresh cycle) and iPhone and iPod lines. Now all are end summer/Autumn.

As for the mini, rushing it out isn't what happened - I don't see it that way at all, unless you want to slam the product or declare it to be inferior or a piece of crap (which several on this forum love doing) and which millions of thrilled owners all heartily reject. For one thing there are rumours it was late (supply chain issues), and these devices can't be thrown together in a few weeks or months; this thing has been in the works for awhile and a lot of thought went into it. Apple did a great job with the mini. Don't get me wrong I wanted a better resolution screen, but what they did do was actually quite brilliant and you cannot fault them for their decisions, you must applaud their brilliance. They created a form factor that is so incredibly compelling that it defines the device (it makes the mini, the mini) and is the main feature of this device (now and forever, which is great!), just as it should be. A smaller form factor iPad shouldn't be fat and heavy with low battery life, it should maximise "smaller form factor" in every way imaginable, because that's how it is differentiated from the full sized iPad (this is product strategy genius - product differentiation at its finest). Also, the screen is actually better than the iPad 2, which is a current product in Apple's iPad lineup, so the world doesn't see the mini as inferior or outdated technology, only people on this forum (and Android forums too<grin>). Now, let's look at what they did for the developer community and entire iOS ecosystem - on day one apps that were sitting there in the App Store got millions (!!) more customers for their products without any modifications to the apps whatsoever. Developers must be as thrilled as I am that I had so many app choices when I brought my mini home the first day - how different it would have been with a different screen resolution on the mini (and not really enough time before Christmas for all those developers to update their apps in time for the buying frenzy associated with these new devices opened on Christmas Day, meaning owners would have limited choices of great apps, making its value less than what it was and is).

The mini is selling so well now, proving that the lack of retina is not such a big issue with people (as it surprisingly isn't with me, which I thought it would be), and the majority of the market do not buy on spec, so processor speed and RAM are non-issues as it should be - the product performs wonderfully (it runs the apps which should be how you judge it), and that is what matters, not which particular numbers are etched onto a piece of silicon inside a case you'll never open.

As for release schedules next year, here's my thinking: the mini is a new product, and it is selling well (as you say we don't know the numbers but we can assume it's selling well), not the least of which reason is that there are still stock issues (here in the UK it's still saying 2 weeks). Given it's selling so well, there is no urgent need to rush to upgrade the thing (as there was no urgent need, pre-Christmas to rush to upgrade the iPad 3), that would be a huge waste of money, the product is in demand as it exists so they will take their time and upgrade it at the end of next year with what we hope is some version of retina (though, I'd love to talk with you and others about what everyone thinks is logical for a resolution for this device). A smart company doesn't cut off a strong sales and revenue stream if they don't need to, and upgrading the mini in March would do just that. I'm with you on this silly death of the full sized iPad, it's not going away and it's not going to become inferior to the mini - the products aren't in competition with each other, and owning one vs. the other doesn't make someone a winner for choosing the winning device, that's just silly and juvenile and so immature. Both products are great, and both will continue to get upgrades and Apple's backing going forward, and both will sit alongside one another, differentiated from each other in unique ways. Personally, I think we'll see one upgrade to the iPad line (both versions) at the end of next year, and I can't wait to see what they have in store for us. Exciting times ahead!

 

[Rogifan]

It sound all good until the competitor start to eat your cake. Why would Apple price the Ipad and Ipad mini so aggressively and update Ipad 4 now instead of wait for another 6 months? Every business want to maximize their profit but there is limitation on what they can do. Iphone has 50-60% gross margin, Ipad 3 has 23-32% gross margin and Ipad min at best has high teen gross margin (Samsung trial document + last Q Apple earning call Q&A). Nexus 7, Nexus 10, Kindle Fire HD, NOOK etc is forcing Apple's hand on the tablet side. Samsung, HTC etc is forcing Apple's hand in smartphone side. Apple has grabbed most of the profit in the industry but it's market share is getting smaller and smaller. At some point the smaller market share will impact the ecosystem. And the premium device status hinge on the fact that Apple has the latest technology. How do Apple maintain the premium pricing if it had older technology consistently when compare to competitor? You can see the big dip in Iphone sales in 2Q12 and 3Q12 as a proof that old technology won't sell much even if it has Apple name on it. Didn't S3 outsell Iphone in 2Q12 or 3Q12? But Iphone 5 will outsell everything else in 4Q12?

Do you have any sales figures for all these other tablets that are "forcing Apple's hand"? Especially the 10" models that aren't $199 (or less).

 

[palpatine]

You and I see things very differently. Here's my take: Exciting times ahead!

I am underwhelmed by the Mini. It is a medium sized iPod with a circa 2007 screen and a circa 2011 processor. Let the angry rebuttals begin! But, that is what I see when I look at the fuzzy screen

As for the refresh of the iPad 4, it is not terribly impressive to me, but it also doesn't seem like an expensive thing to do either. They changed the connector (teardowns show that they just left the freed up space empty) and swapped out the chip. Big deal. I have no idea what "huge" means, but I doubt Apple is sweating it. They swap out processors and other components all of the time mid-cycle. If you treat it like an MBP, it is just getting its fall spec bump. They catch Christmas folks this way, but don't expect current owners to upgrade. IF sales are slower than expected, it is probably not terribly meaningful yet, because they did what they could to fend off the Nexus and Surface.

The future? Well, this is the first year we can say without equivocation that Apple idevices are both inferior to their Android competitors and they cost more. Yes, we can quibble about nits, apps, yadayadayada, but that's just fanboy delusional talk. Let's stick to hardware. Last year at this time, the best tablet was obviously the iPad (Asus was embroiled in their wifi / gps fiasco with the Prime). You had to be a delusional Android fanboy not to see that. This year is clearly a whole new game. Next year we'll see competition heat up even more, so I expect Apple will try to bring the Mini up to par and push the iPad as far as they can to improve speed, weight, etc.

Again, we have no numbers, so assumptions about sales aren't terribly convincing to me, and they certainly don't "prove" anything. Personally, I'm glad to see the Mini, because I think Apple needed to compete with the 7 inchers, but I'll probably actually be excited by the Mini 2.