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Apple suppliers say iPhone 5 demand still strong, iPad mini cannibalizing 9.7" iPad

post #1 of 61
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Demand for the iPhone 5 remains strong as supply and yields continue to improve, but total iPad sales for the holiday quarter may prove lower than market watchers expect, as the iPad mini cannibalizes sales of the new fourth-generation iPad.

In his talks with Apple's supply chain, Shaw Wu of Sterne Agee found that lead times of the iPhone 5 are now at the same day. That's an improvement from recent turnaround times of two to four days.

Wu has increased his iPhone forecast to 47.5 million for the holiday quarter, up from a previous prediction of 47.3 million. His expectations are higher than market consensus that Apple will sell between 45 million and 46 million iPhones.

As for the iPad, Wu has reduced his projected sales from 25 million to 23.5 million. His new forecast is a bit below market consensus of between 23 million and 24 million.

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Wu has cut his iPad sales projection because of continued constraints on iPad mini supply, and lower build orders for the fourth-generation iPad. Sales of the full-size 9.7-inch iPad may be slower than expected, Wu said, because of some cannibalization from the smaller and less expensive iPad mini.

However, he also added that demand for the iPad mini remains strong, suggesting consumer preferences are simply shifting to the smaller form factor. Shipments of the iPad mini are simply limited because of supply constraints.

From conversations with a broad set of investors in recent weeks, Wu believes shares of AAPL stock will continue to be volatile until the end of 2012. This instability comes from Wu called "non-fundamental factors" such as profit taking, rather than a reflection on the company's recent performance.

"However, as we enter 2013, investor sentiment will likely shift back to fundamentals," he said. "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."
post #2 of 61
This will be bad news for AAPL.
It is very dissapointing that iPad sales are being cannibalized by iPad sales.
Perhaps Apple should make something nobody wants, to make the "flagship" products more appealing.
Works for everyone else !
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post #3 of 61
"He also added that demand for the iPad mini remains strong, suggesting consumer preferences are simply shifting to the smaller form factor"...

A device that's primarily hand-held, providing near-identical functionality to a larger/heavier/more costly one is doing well in a smaller/lighter/cheaper package... You Don't Say?
"Why iPhone"... Hmmm?
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"Why iPhone"... Hmmm?
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post #4 of 61
Quote:
Originally Posted by amoradala View Post

This will be bad news for AAPL.
It is very dissapointing that iPad sales are being cannibalized by iPad sales.
Perhaps Apple should make something nobody wants, to make the "flagship" products more appealing.
Works for everyone else !

LOL. you forgot the s/ tag, you know there will be folks telling you you are an idiot any moment ...

I sadly agree this will hurt AAPL though. All Apple news hurts AAPL these days ... if they came out with a pill you add to water to make Fusion power analysts would scream sell!
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post #5 of 61
Perhaps Apple underestimated iPad mini demand? I'm actually surprised at how well the product has been received. I fully expected the iHaters to whine about no retina, A5 chip, etc. but in almost every review I've read th design, form factor battery life and ecosystem out weighted lack of retina. In fact David Pogue at the NY Times said if he was stranded on an island and could only have one gadget with him it would be the mini.

If Apple can find a way to get retina into this form factor with the same great battery life other tablets will be in a world of hurt. Especially if the 5th gen iPad gets thinner and lighter. Game over.
post #6 of 61

I love the form factor of the mini and use it much more than I did my iPad 3. 

LOL people should just enjoy whatever phone they prefer and stop being d-bags about other phones they don't use. Fanboys are pathetic, regardless of whether they are Android or Apple ones.
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LOL people should just enjoy whatever phone they prefer and stop being d-bags about other phones they don't use. Fanboys are pathetic, regardless of whether they are Android or Apple ones.
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post #7 of 61

While iPad Mini may be cannibalising some iPad (4th gen) sales I'd be willing to put money on the new sales to people who have bought a Mini but would never have bought a full size iPad far outweighing this...

 

The iPad model I can see suffering most from the Mini cannibalisation is the iPad2 - the Mini has the same screen resolution at a higher dpi and is faster, lighter and cheaper so unless you absolutely must have the 10 inch screen why on earth would you pick an iPad2 over a Mini?

 

 

I personally know at least 4 people who have recently bought minis having previously rejected the full size iPad on issues of both price and weight.

post #8 of 61
I'm sorry, but where is the source link for this story? AI quotes all this information, but doesn't provide a source to where they got it from.

With that being said, I sold my iPad 3 32GB WiFi about a month before the iPad mini announcement in order to get top dollar for it. I then bought an iPad mini 16GB WiFi at the end of November. I used it for about 4 days, and ended up taking it back to the Apple store.

I kept trying to tell myself "the screen doesn't bother me, the screen doesn't bother me, the screen doesn't bother me". But after looking at the iPad mini's screen, and having to keep zooming in to make text legible on websites (something I never had to do with my iPad 3), and just the overall poor quality of text wore me down. Also, jumping back and forth between my iPhone 5 and the iPad mini made the text legibility issues even more apparent.

The screen was fine for me in games and most apps. But the Safari browsing experience (what I use an iPad most for) just killed it for me.

Don't get me wrong, I loved the thinness and light weight of the mini, but I won't return to the form-factor until it gets a Retina update.
post #9 of 61
Come on, the market wants to hear IPAD MINI SALES is POOR , GOOD that it doesnt cannibalizing 9.7' ipad?
post #10 of 61
Quote:
Originally Posted by crazy_mac_lover View Post

Come on, the market wants to hear IPAD MINI SALES is POOR , GOOD that it doesnt cannibalizing 9.7' ipad?

No. The market wants to hear that "iPad mini sales are poor", but "still cannibalize sales of the bigger model", "10 reasons to choose the Surface/nexus instead of an iPad".

post #11 of 61

 but total iPad sales for the holiday quarter may prove lower than market watchers expect, as the iPad mini cannibalizes sales of the new fourth-generation iPad.

 

lol wut?

 

So in other words, iPad sales will be just fine. An iPad Mini is still an iPad. What difference does it make (other than perhaps in profit) which model it is?

 

We don't say that "Mac sales for the holiday quarter may prove lower than market watchers expect, as the the Macbook Air cannibalizes sales of the new Macbook Pro."

 

What, will Apple be releasing separate numbers for the iPad and iPad Mini?

 

1confused.gif

post #12 of 61

I wonder if the 13" MBP cannibalizes sales of the 15" MBP? 

 

If so, should there only be one MBP? Personally I think it was inevitable and instead of looking at cannibalization we need to look at overall tablet sales.

 

I also think Apple suspected this was going to happen and priced the mini accordingly.

post #13 of 61
oh no! apple only sold eleventy billion units, instead of the eleventy billion and one that the, uhm, analysts were expecting. there goes aapl.
post #14 of 61

I really dislike this guy. His pumped up guidance just about always far exceeds Apple's own guidance, which is generally conservative. Yet, when Apple misses the fairy tale guidance, yet exceeds its own, Apple gets hammered. 

post #15 of 61

Apple and specifically Tim Cook has always said that it's better to cannibalize yourself than have someone else do it.  Get a grip, people.

post #16 of 61
As a first minute ipad mini adopter, I can tell you I think it's great. I don't miss the retina and don't want it if it will make the device heavier, thicker, less battery life or hotter. The reg ipad is just too big for what I needed. I use it primarily on the train. I stated for years a mini was a needed and wanted size, and despite the numerous folk here who said it would be terrible and bomb, the market has borne out the need for it.
post #17 of 61
Quote:
Originally Posted by Sevenfeet View Post

Apple and specifically Tim Cook has always said that it's better to cannibalize yourself than have someone else do it.  Get a grip, people.

Agreed, but in Analyst speak it goes like this ... "But ... but ... These people buying Apple products are not buying Apple products with the money they bought Apple products with! OMG this is terrible, sell sell sell ..."
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post #18 of 61
Quote:
Originally Posted by paxman View Post

I wonder if the 13" MBP cannibalizes sales of the 15" MBP? 

If so, should there only be one MBP? Personally I think it was inevitable and instead of looking at cannibalization we need to look at overall tablet sales.

I also think Apple suspected this was going to happen and priced the mini accordingly.

I wonder if the 11" MacBook Air cannibalizes sales of the 13" MacBook Air. As far as I can tell, not significantly.

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post #19 of 61
So, maybe Apple knew something about pricing the iPad Mini after all? Everyone wanted them to price it lower to garner market share. Or, that at such a price it HAD to have a Retina display. Yet, it seems to be doing just fine, and IF it is canabalizing the full size iPad at least it will still be making a good profit!
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post #20 of 61
" iPad mini cannibalizing 9.7" iPad" Nah, the Mini is just for xmas kids. Post xmas , adults will stuck it in the drawer for that occasional weekend away and buy the proper one. iPad Mini, refreshes profits that iPad 2 can never reach.
post #21 of 61

Apparently... all those iPad Mini sales are cannibalizing sales of Amazon and Android tablets....

 

More's the pity...

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post #22 of 61
Quote:
Originally Posted by DaHarder View Post

"He also added that demand for the iPad mini remains strong, suggesting consumer preferences are simply shifting to the smaller form factor"...
A device that's primarily hand-held, providing near-identical functionality to a larger/heavier/more costly one is doing well in a smaller/lighter/cheaper package... You Don't Say?

Well some people, on here, certainly never thought it could ever happen!!

post #23 of 61
My iPad mini is my favorite so far and I own all versions of iPad. I'm a developer and need to test on each. The form factor is the best part. It's light and portable and feels like you are carrying a booklet and not a small notebook. Surprisingly I don't miss the reduction in size and it still feels like a full iPad to me. If they add an A6X chip and Retina, nothing could touch it. Make it $499 and it will sell like hotcakes. (which is a silly phrase because I'm not sure hotcakes sell much faster than pancakes, french toast or other breakfast pastry)
post #24 of 61

It's not cannibalizing anything. iPad mini still sells all those apps, games, music, books and movies. Apple wins anyway. Apple even talked about this on their financial call. They want more people to have iPad. Doesn't matter which one.

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post #25 of 61
Quote:
Originally Posted by Quadra 610 View Post

 but total iPad sales for the holiday quarter may prove lower than market watchers expect, as the iPad mini cannibalizes sales of the new fourth-generation iPad.


lol wut?


So in other words, iPad sales will be just fine. An iPad Mini is still an iPad. What difference does it make (other than perhaps in profit) which model it is?


We don't say that "Mac sales for the holiday quarter may prove lower than market watchers expect, as the the Macbook Air cannibalizes sales of the new Macbook Pro."


What, will Apple be releasing separate numbers for the iPad and iPad Mini?


1confused.gif
If I'm reading this right, the theory is iPad mini is cannibalizing sales of iPad and there are supply constraints with the mini therefore overall sales will be less?
post #26 of 61
Quote:
Originally Posted by Suddenly Newton View Post


I wonder if the 11" MacBook Air cannibalizes sales of the 13" MacBook Air. As far as I can tell, not significantly.

How can you tell? What's your scoop? Where are the stats? And the 11" was launched at the same time as the 13", was it not? I'd be interested in how you evaluate cannibalization in such a scenario. (I don't think you can count the first Air as it was a very different beast at a very different price point).

post #27 of 61
Quote:
Originally Posted by Rogifan View Post

Perhaps Apple underestimated iPad mini demand? I'm actually surprised at how well the product has been received. I fully expected the iHaters to whine about no retina, A5 chip, etc. but in almost every review I've read th design, form factor battery life and ecosystem out weighted lack of retina. In fact David Pogue at the NY Times said if he was stranded on an island and could only have one gadget with him it would be the mini.
If Apple can find a way to get retina into this form factor with the same great battery life other tablets will be in a world of hurt. Especially if the 5th gen iPad gets thinner and lighter. Game over.

Hates will always find a way to bash Apple. I read this from an investment blog the other day:

  • Before the iPad Mini: Apple is losing ground to the 7" tablets made by Android vendors
  • On the day it came out: no retina, more expensive than Android, will fail
  • After the iPad mini: too cheap, causing margin compression, hurt regular iPad sales

 

Haters are like that... always hate with or without a reason.

post #28 of 61

Actually this matters a lot, in fact I've said here many times, a lot of people will be buying the iPad mini instead of the bigger iPad, and this will hurt both the total revenue and margin. I'm not suggesting Apple should not have produced the mini, but I'm just saying it's bad for AAPL, at least until Apple figures out a new way to sell premium high margin iPads again. 

post #29 of 61

Wrestled with this two nights ago. Gave my (still awesome) iPad 2 to my daughter and went with the New iPad. I love the form factor of the Mini but the beautiful Retina screen and significant horsepower increase was enough to sway me.

post #30 of 61
Quote:
Originally Posted by drobforever View Post

Actually this matters a lot, in fact I've said here many times, a lot of people will be buying the iPad mini instead of the bigger iPad, and this will hurt both the total revenue and margin. I'm not suggesting Apple should not have produced the mini, but I'm just saying it's bad for AAPL, at least until Apple figures out a new way to sell premium high margin iPads again. 

 

I am sure Apple ain't sweating this one. The day they start AAPL direct their efforts is they day the boat starts sinking.

post #31 of 61
Quote:
Originally Posted by baeder View Post

So, maybe Apple knew something about pricing the iPad Mini after all? Everyone wanted them to price it lower to garner market share. Or, that at such a price it HAD to have a Retina display. Yet, it seems to be doing just fine, and IF it is canabalizing the full size iPad at least it will still be making a good profit!

Agreed. The mini cannibalizing iPad 4 sales would be a problem if Apple priced it super cheap like a lot of the tech writers and fans said they should. They made the right choice as far as price point.

LOL people should just enjoy whatever phone they prefer and stop being d-bags about other phones they don't use. Fanboys are pathetic, regardless of whether they are Android or Apple ones.
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LOL people should just enjoy whatever phone they prefer and stop being d-bags about other phones they don't use. Fanboys are pathetic, regardless of whether they are Android or Apple ones.
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post #32 of 61
Quote:
Originally Posted by Mazda 3s View Post

I'm sorry, but where is the source link for this story? AI quotes all this information, but doesn't provide a source to where they got it from.

I think those notes are provided as part of a subscription service. I hope the more investment oriented forum members can clarify that more.

Quote:
With that being said, I sold my iPad 3 32GB WiFi about a month before the iPad mini announcement in order to get top dollar for it. I then bought an iPad mini 16GB WiFi at the end of November. I used it for about 4 days, and ended up taking it back to the Apple store.
I kept trying to tell myself "the screen doesn't bother me, the screen doesn't bother me, the screen doesn't bother me". But after looking at the iPad mini's screen, and having to keep zooming in to make text legible on websites (something I never had to do with my iPad 3), and just the overall poor quality of text wore me down. Also, jumping back and forth between my iPhone 5 and the iPad mini made the text legibility issues even more apparent.
The screen was fine for me in games and most apps. But the Safari browsing experience (what I use an iPad most for) just killed it for me.
Don't get me wrong, I loved the thinness and light weight of the mini, but I won't return to the form-factor until it gets a Retina update.

I think I get what you mean, but I think it might be Fall, if not fall 2014 before there is a Retina iPad mini. iPhone 5 and iPad mini do have a similar number of pixels.
post #33 of 61

Although it seems a poor-in-facts story, I must say I find the iPad weight too heavy for wearing it the whole day. Its weight falls not too far away of the Macbook Air, with the difference that the MBA runs OSX. On the other hand, the iPad Mini is much lighter, and you can wear it with you comfortably. With these two offerings, I find the iPad Mini much more comfortable for wearing it with you. If you hold both on your hands, you'll realize what I'm talking about. Of course I'd like to have the screen size of the big iPad with the weight of the iPad Mini, but, if it's technically impossible, I might prefer sacrificing screen size for the comfort of a lighter weight.

post #34 of 61

My thought has been that they could have priced the mini cheaper, yes. But..I feel they priced in the cost of the retina beforehand. It took them two iterations before they got retina on the iPad Maxi (I had to) where it was still able to keep their margins. No price increase from non-retina to retina. I see that same thing happening for the mini. Yes they could have done retina now but at what cost..plus the reasoning that the mini needed to run current iPad apps with no problems out of the gate. I'm with JeffDM that the retina mini won't be until 2014 but I'm thinking spring instead of fall. People will be itching for it.

 

And I should add that I love my mini. Easy, light..screen doesn't bother me and I have a 5. My original iPad (I know..long tooth) doesn't really get used anymore.

 

I believe it was this size that Apple wanted to do all along. I think it was easier for them to come out with the iPad Maxi first and then shrink it (smaller, lighter, lower cost) instead of the upsell they would have needed by coming out with a 7.9" first and enlarging it to 9.7" (bigger but heavier and more costly).

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post #35 of 61
Quote:
Originally Posted by Rogifan View Post

Perhaps Apple underestimated iPad mini demand? I'm actually surprised at how well the product has been received. I fully expected the iHaters to whine about no retina, A5 chip, etc. but in almost every review I've read th design, form factor battery life and ecosystem out weighted lack of retina. 

 

The reason is very simple: Apple doesn't design products for cheapskate tech nerds who hang around in web forums wailing about how they'll jump to Android if the next iPhone doesn't have a sixty-inch screen, a fifty-year battery life, runs OSX, fits in a matchbox, and costs $29.99

 

Apple designs products for busy people with... er... lives.

post #36 of 61
I agree with predictions that the Mini will BE the mainstream iPad. The big guy will still sell well, but it will come in second. I may even go the Mini route myself (with retina... in about a year I hope).

Which means, I REALLY HOPE that all iPads, including the Mini, gain a 128 GB option! I like massive games too much. I hoard them. It is unhealthy, but so be it.
post #37 of 61
Quote:
Originally Posted by JeffDM View Post

I think I get what you mean, but I think it might be Fall, if not fall 2014 before there is a Retina iPad mini. iPhone 5 and iPad mini do have a similar number of pixels.

 

They have a similar number of pixels, but the screen density is what makes the difference. Living in a vacuum, the iPad mini's screen is great -- great color reproduction, good viewing angles. I think the problem in my case is that I came from an iPad 3 which made the text legibility issues even more apparent.

 

Add on top of that I have my iPhone 5 where text looks as sharp as a tack, then I move over to the iPad mini and text doesn't look anywhere near as clear and crisp. I can only compare it to the difference moving from my iPhone 3GS to an iPhone 4. It was a phenominal leap. When I made the switch to the iPhone 4, my wife still had a 3GS. Using her phone was like torture to me (not literally of course).


Apple spoiled me with Retina... that's all I can say.

 

With that being said, the iPad mini form-factor is AMAZING! I loved everything about it from an ergonomics aspect. The weight, the thinness... I didn't even mind the reduced border around the screen. Like I said, I'm sold on the form-factor; add Retina and I'll be back for more. Until then, I'm getting an iPad 4.

post #38 of 61
Wu does he think he is? Pulling such estimates from his ...
post #39 of 61

JESUS CANNIBALIZING GOD !! lol.gif


Edited by crazy_mac_lover - 12/12/12 at 11:00am
post #40 of 61
I played around recently with an iPad Mini. Didn't do it for me, colour saturation on the screen was visibly inferior to the Retina iPad. But it was its size that was the main issue for me. Even though you can hold it with one hand at its edges, its still too wide to be held that way for an extended period of time so I found myself automatically turning it round to landscape format all the time. It did feel very solid though. But I'm still going to get an iPad 4. A second generation version with a wider bezel for more comfortable holding in portrait format with no smudges on screen and improved quality display might sway me next time around.
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