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Every five 'iPad mini' sales projected to cannibalize one full-size iPad

post #1 of 83
Thread Starter 
Apple's anticipated "iPad mini" is forecast to have a cannibalization rate of 20 percent, which would mean every five smaller iPads sold would take the place of one full-size 9.7-inch iPad.

Assuming Apple's 7.85-inch iPad goes on sale Friday, Nov. 2, analyst Gene Munster with Piper Jaffray sees the company selling at least 5 million units in the December quarter. That would be enough to cannibalize a million regular iPad units during the holiday shopping season, he believes.

Munster had previously forecast sales of 21 million iPads in the December quarter. But with the expected launch of the so-called iPad mini at Apple's event next week, he has increased total iPad sales to 25 million.

For calendar year 2013, Munster's iPad sales estimate has increased from 86.5 million to 95 million, accounting for additional sales from the iPad mini. He sees smaller iPads accounting for about a quarter of Apple's total iPad sales next year.

But because the smaller iPad is expected to be offered at a significantly lower price point than the traditional iPad, Munster's forecast also calls for the average iPad selling price to drop in calendar 2013 from $527 to $495.

iPad mini Rendering

"iPad mini" rendering by Martin Hajek


He believes that the iPad mini will likely be priced at between $249 and $299 for the entry level model. For that price, he sees Apple offering 8 gigabytes of storage and a non-Retina display.

He thinks a fair amount of customers would opt for greater capacity with an iPad mini, which is why he sees an average selling price for the new, smaller iPad of between $350 and $360. That would be about a 20 percent increase from an assumed base price of $299, a number in-line with current iPad sales figures.

Munster's earlier forecasts had assumed that Apple would not offer a "full slate of options for storage and wireless" with the new, smaller iPad. But he cited a report published by AppleInsider on Tuesday that revealed a slew of new iPad models Apple is set to unveil next week that suggest the iPad mini will be available in a range of capacities and colors with various connectivity options, including cellular data.
post #2 of 83
That's par for the course and why Apple does so well, they don't fear progress even at their own products' expense.
Been using Apple since Apple ][ - Long on AAPL so biased
nMac Pro 6 Core, MacBookPro i7, MacBookPro i5, iPhones 5 and 5s, iPad Air, 2013 Mac mini, SE30, IIFx, Towers; G4 & G3.
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Been using Apple since Apple ][ - Long on AAPL so biased
nMac Pro 6 Core, MacBookPro i7, MacBookPro i5, iPhones 5 and 5s, iPad Air, 2013 Mac mini, SE30, IIFx, Towers; G4 & G3.
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post #3 of 83
Yeah, but that also mean 4 out of 5 iPad mini sales are the result of new buyers. Good news.
post #4 of 83
Quote:
Originally Posted by TimUSCA View Post

Yeah, but that also mean 4 out of 5 iPad mini sales are the result of new buyers. Good news.

 

Or people who buy the mini and already have an iPad.

 

I found the title somewhat difficult to comprehend (not a native english speaker, so maybe that's the problem?). I would have said every 1 in 5 persons who buy an iPad mini will do so instead of buying the iPad 2/3

post #5 of 83
ISn't the Nexus 7 a Retina display with 8Gb at 200$? I think I read that...

Social Capitalist, dreamer and wise enough to know I'm never going to grow up anyway... so not trying anymore.

 

http://m.ign.com/articles/2014/07/16/7-high-school-girls-are-kickstarting-their-awa...

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Social Capitalist, dreamer and wise enough to know I'm never going to grow up anyway... so not trying anymore.

 

http://m.ign.com/articles/2014/07/16/7-high-school-girls-are-kickstarting-their-awa...

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post #6 of 83
Munster wants us to believe that folks would have bought the regular iPad if the mini doesn't happen. And that might be true, if they are forced to buy it for one thing like the kiddies have to have it for school.

Otherwise, he is full of crap. Folks that buy the mini in 90% of cases would not have bought the full one because it was too big etc. so the Mini would cannabalize the Kindle etc.

A non tech's thoughts on Apple stuff 

(She's family so I'm a little biased)

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A non tech's thoughts on Apple stuff 

(She's family so I'm a little biased)

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post #7 of 83
Did you ever just get sick of these so-named 'analysts' guessing? Just look at their iPad 1 year 1 guesses? Embarrassing.
Citing unnamed sources with limited but direct knowledge of the rumoured device - Comedy Insider (Feb 2014)
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Citing unnamed sources with limited but direct knowledge of the rumoured device - Comedy Insider (Feb 2014)
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post #8 of 83
Quote:
Originally Posted by lightknight View Post

ISn't the Nexus 7 a Retina display with 8Gb at 200$? I think I read that...

 

It's 7" (16:10) with 1280x800 display (216ppi, I'll leave it to Apple marketing to define if that's retina), new 32Gb model will be out this week voor $249.

 

iPad mini with suggested 7.85" 4:3 1024x768 display will have 163ppi


Edited by mausz - 10/17/12 at 7:26am
post #9 of 83
Absolute bull. There is absolutely no way you can gauge the popularity of an unreleased product. Any calculations of "cannibalisation rates" he does are pure fantasy and given the messenger, not worth talking about.
post #10 of 83
Quote:
Originally Posted by mausz View Post

 

It's 7" (16:10) with 1280x800 display (216ppi, I'll leave it to Apple marketing to define if that's retina), new 32Gb model will be out this week voor $249.

 

iPad mini with suggested 7.85" 4:3 1024x768 display will have 163ppi

216 ppi is probably not enough to call it Retina, but it'll be higher resolution than what the rumors are saying the iPad mini will be. We'll have to wait and see. That will put some pricing pressure on Apple, but they likely won't match it. I suspect it'll be 16GB for $299.

post #11 of 83
It's unlikely to change my wife's and my buying habits when it comes to iPads.

I bought the first gen and my wife the second. I then bought the 3rd gen (Retina) and despite the iPad mini coming out she is going to be buying the gen 4, and so on.

My wife has said that she has, key word "also" always wanted a smaller one for when we go places and she takes a smaller purse with her. That way she won't have to leave her "big" iPad behind. But she definitely wants the "big" iPad too though. And especially since it has the better screen.
post #12 of 83

I frankly don't see where the hell those stats come from.

post #13 of 83
Quote:
Originally Posted by lightknight View Post

ISn't the Nexus 7 a Retina display with 8Gb at 200$? I think I read that...

Oh sunshine.. it isn't that simple.

 

the nexus is cheap, has cheap low quality software, low quality apps..

 

different devices, totally.

post #14 of 83
Quote:
Originally Posted by Sabon View Post

My wife has said that she has, key word "also" always wanted a smaller one for when we go places and she takes a smaller purse with her. That way she won't have to leave her "big" iPad behind. But she definitely wants the "big" iPad too though. And especially since it has the better screen.

 

Yeah, that's going to be hard to judge. The iPad mini will, of course, cannibalize some sales of the full size pad. But you're just got to wonder how many people who already have an iPad are ALSO going to buy a mini?

 

And while you're at it, how many of those people will keep the mini? Or sell their full size iPad if they decide the smaller version better suits their purposes.

 

Heck, for all we know, the smaller version could cannibalize sales of 4 out of 5 full size iPads...

post #15 of 83
The iPad 3 is the perfect size. When you read magazines (People, Time, etc.) you get the full page and you can not enlarge it. It will be too tiny to read on the small screen.
post #16 of 83

I think Apple needs to give people as much reason as possible to buy a full-size iPad over an iPad mini to reduce any "cannibalization" that may happen. Otherwise what is there to make you choose a full-size iPad, just having an extra 2" screen? How does that justify a price that will be around twice as expensive as an iPad mini? I'm thinking it makes sense for the mini to have lower capacity storage AND a 1024x768 resolution. It just seems logical that they'd keep the resolution the same as the iPad 1/2 so all the apps work natively. Regardless of what any Android tablets are doing I'd still say it's a great deal and will probably end up buying a few as Christmas presents. There needs to be enough in the new iPad to make you choose it over a mini.

post #17 of 83
Quote:
Originally Posted by lightknight View Post

ISn't the Nexus 7 a Retina display with 8Gb at 200$? I think I read that...

 

The Nexus 7 wouldn't be a Retina display as the term is currently defined.  It has a PPI of only 216.  

 

The iPad 3 and iPhone 5 are both Retina density and they have 264 and 326 PPI respectively.  Any mini tablet would have to be in between those two numbers to be Retina and probably closer to the larger number than the smaller since a mini iPad would be held no closer than an iPhone a lot of the time.  We are probably talking at least 300 PPI before you could really use the term, but if I was Apple, I would match the iPhone's 326 PPI to be certain.  Since a 1024x768 mini would be only 163 PPI, doubling it next year would make it the same PPI as the iPhone Retina screen. 

 

So ... a Nexus 7 is actually only about 65% of a Retina density screen and an iPhone mini with the reported low density screen would be "half-Retina." 

post #18 of 83
Quote:
Originally Posted by Gazoobee View Post

Absolute bull. There is absolutely no way you can gauge the popularity of an unreleased product. Any calculations of "cannibalisation rates" he does are pure fantasy and given the messenger, not worth talking about.

 

In your own words absolute bull. There are obvious ways of gauging popularity of unreleased products, not least of all research into people's purchasing intentions - you ask them. You can also look at buying trends in similar markets, e.g. the android tablet market where multiple sizes are available. 

 

We're not talking about a device which is so groundbreaking that people might not know they want it until they've seen it (like the iPad and iPhone when they were first introduced). People have seen iPads. People have seen 7" tablets. It's not that hard to envisage a 7.85" iPad.

 

Such forecasting must be taken for what it is, a tentative prediction in the light of (a) not having seen/held the product and (b) not knowing the price. It's not an exact science, but nor is it an invalid process to attempt as you suggest.

 

We don't dismiss weather forecasting as pointless because it sometimes turns out inaccurate, we accept it for what it is.

post #19 of 83

deleted


Edited by MacRulez - 1/22/13 at 7:03am
post #20 of 83
Quote:
Originally Posted by BoxMacCary View Post


The Nexus is a fucking piece of convoluted, unintuitive shit.
I speak, unfortuneately so, from first hand & intensive experience.
And this is the "flagship" Android tablet?!?
Anyone who says that the trashing of the Nexus is "just Apple fanboi-ism"
is a complete & utter asshole.

 

Well, one thing for sure, you don't mince your words. But yeah, I can't stand Android either (my personal opinion).

post #21 of 83
I think this unit might sell a ton of product going into markets that don't yet use iPads, don't normally use a computer for certain types of jobs.
I think a 5 inch version might also be a good idea as well. The larger form factor STILL has a market due to the more screen real estate available. Certain functions kind of need the larger screen. I can also see some people buying each size just to have depending on a particular need.
post #22 of 83
Quote:
Originally Posted by kevt View Post

 

In your own words absolute bull. There are obvious ways of gauging popularity of unreleased products, not least of all research into people's purchasing intentions - you ask them. You can also look at buying trends in similar markets, e.g. the android tablet market where multiple sizes are available. 

 

We're not talking about a device which is so groundbreaking that people might not know they want it until they've seen it (like the iPad and iPhone when they were first introduced). People have seen iPads. People have seen 7" tablets. It's not that hard to envisage a 7.85" iPad.

 

Such forecasting must be taken for what it is, a tentative prediction in the light of (a) not having seen/held the product and (b) not knowing the price. It's not an exact science, but nor is it an invalid process to attempt as you suggest.

 

We don't dismiss weather forecasting as pointless because it sometimes turns out inaccurate, we accept it for what it is.

 

None of these methods you speak of are anywhere near reliable or factual.  Asking people what they feel about a product they have never seen or used (or even seen a review or advertisement for), is just ridiculous.  I realise it's done all the time, but the idea that such activities have any level of accuracy at all or can actually tell us anything meaningful is poppycock.  

 

- Gene Munster is a fraud.  He is even less accurate than other analysts who are also, as a group, woefully incorrect the majority of the time.  

 

- "Customer surveys" are notorious for being possibly the least accurate way of getting to the bottom of anything.  People lie constantly, unconsciously, and most of the time without even being aware that they are.  

 

For the record, Weather Forecasting is also incorrect more often than not and anyone who takes either "prediction" as any kind of scientific fact, or even a somewhat accurate forecast of future events, is just fooling themselves.  One almost might as well read the Astrology in the morning paper instead.  

 

So when I say it's "bull" I mean that there is no way that he could obtain anything like reliable information about possible cannibalisation at this stage of the proceedings.  His prediction may even turn out to be accurate, but his methodology is shite, his track record is very very poor, and everything about the "numbers" he is determining will change both with the actual release and with the initial public reaction to the new product.  

 

Again, this makes everything he says essentially meaningless

post #23 of 83

Reading books on my iPad (3) can get tiring after a while. The screen is gorgeous, but the weight seems to increase by the hour. 1wink.gif  I'll probably grab a 16GB iPad Mini (or whatever they're going to call it) just for reading books. That's assuming, or course, the it ends up being significantly lighter.
 

post #24 of 83
Quote:
Originally Posted by kevt View Post


 

We don't dismiss weather forecasting as pointless because it sometimes turns out inaccurate, we accept it for what it is.

yes, but no one has stock in the weather. no one sells weather in case the temperature misses the forecasted temperature.

 

These analysts are manipulating stocks prices.

post #25 of 83
Quote:
Originally Posted by Rob55 View Post

 

Well, one thing for sure, you don't mince your words. But yeah, I can't stand Android either (my personal opinion).

 

I think the Nexus hardware is alright.  If it had iOS on it people would be hot to buy it.  

 

This is partly why I think Apple is making a (small) mistake in sticking with all the high end aluminium stuff.  I don't personally see anything wrong with a plastic, cheap, but still well-built mini iPad that could be mass produced for under $100.  The new mini, (if rumours are to be believed), will some in at $50 more than the Nexus with less memory and probably heavier as well.  Apple will probably sell them by the boatload anyway, but IMO it would be better for their customers to sell a cheaper one and they would probably sell more. 

post #26 of 83

Yes, you can. I can almost guarantee you that Apple does similar product forecasting to see how much cannibalization they can expect and if the margins they're estimating will offset it. That's how business works.

post #27 of 83
Quote:
Originally Posted by Gazoobee View Post

Absolute bull. There is absolutely no way you can gauge the popularity of an unreleased product. Any calculations of "cannibalisation rates" he does are pure fantasy and given the messenger, not worth talking about.

 

Yes, you can. I can almost guarantee you that Apple does similar product forecasting to see how much cannibalization they can expect and if the margins they're estimating will offset it. That's how business works.

post #28 of 83
Quote:
Originally Posted by ahmlco View Post

 

SNIP...

 

Heck, for all we know, the smaller version could cannibalize sales of 4 out of 5 full size iPads...

 

A few guys (of the more creative persuasion) in the bar I drink coffee with who have iPads are almost certainly buying the "mini" version (and maybe more than one) for their younger children. So I think there will be virtually no cannibalization, but rather a noticeable expansion of the halo effect within family groups.

post #29 of 83
Quote:
Originally Posted by Gazoobee View Post

 

I think the Nexus hardware is alright.  If it had iOS on it people would be hot to buy it.  

 

This is partly why I think Apple is making a (small) mistake in sticking with all the high end aluminium stuff.  I don't personally see anything wrong with a plastic, cheap, but still well-built mini iPad that could be mass produced for under $100.  The new mini, (if rumours are to be believed), will some in at $50 more than the Nexus with less memory and probably heavier as well.  Apple will probably sell them by the boatload anyway, but IMO it would be better for their customers to sell a cheaper one and they would probably sell more. 

 

I see you point, but Apple has to draw the line somewhere. They operate at the higher-end and I think they'd rather produce a high-end small tablet to set themselves apart from the Fires and Nexus' of the world for the extra $50 (or whatever).

post #30 of 83

The iPad Mini is for kids and schools. The new Touch spex may point to the Mini spex and features. The Touch is now a lean and mean and green machine. So Apple has created space for the Touch when the Mini arrives. Best guess for the Mini: Lower screen resolution than the Touch, front side camera only, less memory, no siri, no passbook. But it will have a bigger screen and all those apps and will sell for $200-250 to schools. So the Mini for school; the Touch for home. Adults at work can afford a full blown iPad, as current sales demonstrate clearly. Also the Mini will be lighter, brighter, thinner, faster and much more useful than the Fire or Nook.

 
post #31 of 83
Originally Posted by Stef View Post
The iPad Mini is for kids and schools. So the Mini for school

 

Textbook makers are gonna be excited to make two versions (and formats, etc) of every book.

Originally Posted by helia

I can break your arm if I apply enough force, but in normal handshaking this won't happen ever.
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Originally Posted by helia

I can break your arm if I apply enough force, but in normal handshaking this won't happen ever.
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post #32 of 83
Quote:
Originally Posted by Gazoobee View Post

 

I think the Nexus hardware is alright.  If it had iOS on it people would be hot to buy it.  

 

This is partly why I think Apple is making a (small) mistake in sticking with all the high end aluminium stuff.  I don't personally see anything wrong with a plastic, cheap, but still well-built mini iPad that could be mass produced for under $100.  The new mini, (if rumours are to be believed), will some in at $50 more than the Nexus with less memory and probably heavier as well.  Apple will probably sell them by the boatload anyway, but IMO it would be better for their customers to sell a cheaper one and they would probably sell more. 


Apple doesn't make cheap plastic junk anymore. It's part of the Design. I bet BMW can sell more cars if they use pleather in the upholstery, fake wood, handcrank windows, and plexiglass instead of glass.

post #33 of 83
Quote:
Originally Posted by Gazoobee View Post

I think the Nexus hardware is alright.  If it had iOS on it people would be hot to buy it.  

This is partly why I think Apple is making a (small) mistake in sticking with all the high end aluminium stuff.  I don't personally see anything wrong with a plastic, cheap, but still well-built mini iPad that could be mass produced for under $100.  The new mini, (if rumours are to be believed), will some in at $50 more than the Nexus with less memory and probably heavier as well.  Apple will probably sell them by the boatload anyway, but IMO it would be better for their customers to sell a cheaper one and they would probably sell more. 

Once again, you fail to see—or pretend so that others would not see—Apple's most laudable accomplishment in industrial design and engineering: the use of CNC machined and laser-cut aluminum in portable consumer electronic devices.

This is what they will be known for in the future by those who study the history of industrial design. It is a breakthrough that only an aesthetically driven company with a lot cash would do.

If you don't see this, you don't understand what Apple is about at all.

Plastic? You are living in the past, pre Macbook Air. Don't insult artists like this.
Quote:
Originally Posted by BoxMacCary View Post

The Nexus is a fucking piece of convoluted, unintuitive shit.
I speak, unfortuneately so, from first hand & intensive experience.
And this is the "flagship" Android tablet?!?
Anyone who says that the trashing of the Nexus is "just Apple fanboi-ism"
is a complete & utter asshole.

Way to go Box! But I take it you're talking about the software only. How is that pebbly plastic back with the molded-in brand name?
Edited by Flaneur - 10/17/12 at 10:19am
post #34 of 83
Quote:
Originally Posted by Gazoobee View Post

Absolute bull. There is absolutely no way you can gauge the popularity of an unreleased product. Any calculations of "cannibalisation rates" he does are pure fantasy and given the messenger, not worth talking about.

Correct it is BS guess, but it is ok to talk about and guess.

 

If I were to 'guess' it would be a little larger percentage... 50% or more cannibiliaztion. Why... price, pure and simple. For the 80% of tasks of email and web browsing etc... the 7.8 will be fine.

Hokey religions and ancient weapons are no match for a good blaster by your side, kid.
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Hokey religions and ancient weapons are no match for a good blaster by your side, kid.
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post #35 of 83
Originally Posted by boeyc15 View Post

Why... price, pure and simple. For the 80% of tasks of email and web browsing etc... the 7.8 will be fine.

 

Wow. So everything Apple has taught us about UX just… out the window. 

Originally Posted by helia

I can break your arm if I apply enough force, but in normal handshaking this won't happen ever.
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Originally Posted by helia

I can break your arm if I apply enough force, but in normal handshaking this won't happen ever.
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post #36 of 83
Quote:
Originally Posted by Rob55 View Post

 

I see you point, but Apple has to draw the line somewhere. They operate at the higher-end and I think they'd rather produce a high-end small tablet to set themselves apart from the Fires and Nexus' of the world for the extra $50 (or whatever).

 

Yeah, I understand the why and I know it will likely never happen, but I still think they are wrong to do it that way.  

 

It's just so much of a dodge from the actually cheap Nexus, to make a sort of "fake cheap" iPad.  It's $50 more (for less), and in reality 8GB is just not enough for a lot of folks so the $350 dollar one is the "real" entry point for a lot of people.  I think they will sell more of the 8GB one simply because of the price, but those that get it will be disappointed and I bet we will never see an 8GB iPad from Apple ever again.  It will be like the "fatty" nano.  A stop-gap measure to appease certain short term goals.  A way of "fooling" people into thinking they can afford something they really can't.  It just kind of leaves a bad taste in the mouth IMO. 

 

Microsoft is in the same boat with the MS Surface RT.  It's the same entry price as an iPad, but it doesn't function without the $100 keyboard "accessory."  So again, kind of "fake cheap" in that the "real" price is a hundred dollars more than advertised.  

post #37 of 83

I do not have an ipad, and do not plan on getting one at it's current form and price. I am very interested in the mini though. I can see myself liking the mini and then contemplated getting a full size and passing the mini on to the kids. My thought was just the opposite of the article. The mini may be my gateway to a full size ipad.
 

post #38 of 83
Quote:
Originally Posted by jungmark View Post


Apple doesn't make cheap plastic junk anymore. It's part of the Design. I bet BMW can sell more cars if they use pleather in the upholstery, fake wood, handcrank windows, and plexiglass instead of glass.

 

I would argue that a BMW with plexiglass instead of glass would actually be a bad design, whereas a plastic iPad would actually be a boon to the end user.  

 

Part of the attraction and indeed a part of the design of a BMW is that it's a high end luxury machine, a "precious" and coveted device.  I'm sure Apple would argue similarly for it's iOS devices, but it makes no sense in the context of what they are.  If mobile devices are designed to be ubiquitous (they are), and if they are expected to be even more prevalent and more widely used than a computer desktop or laptop (they are), then they shouldn't really be thought of as precious jewels at all.  They should be "chuckable," resilient and lightweight.  Plastic is perfect for this.  

 

It's no surprise that overall, the biggest area of complaint from users over Apple's iOS devices has always been durability and this very "preciousness."  

 

Apple wants to own this market and dominate it, but they act like they are still aiming for the 10% of elite users at the top in terms of their product design. 

post #39 of 83
Quote:

Originally Posted by Gazoobee View Post

 

It's just so much of a dodge from the actually cheap Nexus, to make a sort of "fake cheap" iPad.  It's $50 more (for less), and in reality 8GB is just not enough for a lot of folks so the $350 dollar one is the "real" entry point for a lot of people.   

 

This is the same game Amazon played when the Fire first came out. They could boast that they had a 7" tablet for $199 and that was enough to win a lot of people over. If Apple does end up making an 8GB variant and sells it for $249, they will likewise generate a lot of sales simple on that fact. Unlike the case of Amazon and the Fire however, Apple has an already established brand in the iPad and people will be willing to pay up for that despite the unit potentially having only 8GB of storage (as has been established by the iPad's domination). For me and what I would like an iPad Mini for, 16GB will be way more than adequate (so I guess that kinda supports your point).

post #40 of 83
Quote:
Originally Posted by SeaNorse View Post

The iPad 3 is the perfect size. When you read magazines (People, Time, etc.) you get the full page and you can not enlarge it. It will be too tiny to read on the small screen.

 

Accurate and succinct Market Research sampling a broad set of potential buyers (n=1).   Apple, I recommend you follow this guy, because obviously he speaks for all the rest of the 3Billion people on earth who buy smart phones or computers.... most of which have never read a magazine online.  But the research doesn't lie.

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