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47% of iPad mini sales to new customers, cannibalization concerns called 'overblown'

post #1 of 38
Thread Starter 
A new survey of iPad mini buyers has found that nearly half are new to the platform, suggesting the smaller form factor will help grow Apple's market share in a big way.

The data comes from a survey of more than 1,000 U.S. consumers published on Monday by Morgan Stanley and AlphaWise. Analyst Katy Huberty said although iPad mini sales are clearly cannibalizing some full-size iPad sales, she believes concerns over this trend are "overblown."

The survey found that the iPad mini has accounted for 34 percent of planned iPad purchases, making the 7.9-inch tablet a "key demand driver" for the platform.

AlphaWise


However, the poll did indicate that the iPad mini is currently attracting slightly fewer new users than the full-size 9.7-inch iPad. While 47 percent of iPad mini buyers said they were new to the platform, 56 percent of those buying a 9.7-inch iPad were new customers.

Huberty said these numbers show her that the cannibalization risk Apple faces with the iPad mini is "manageable."

AlphaWise


The survey also found that Apple grew its tablet installed base the fastest of any company, and its shipment share it expected to stay flat at 50 percent in the U.S. next year. It also found that Apple again has the strongest retention rate in the industry, with 81 percent of iPad owners saying they will stick with Apple.

Among those polled who own an Amazon Kindle Fire, 7 percent said they plan to switch to an iPad, while 2 percent of Samsung tablet owners say they'll buy an Apple tablet. Thirty-six percent of those with no tablet also said they plan to buy an iPad.
post #2 of 38
Wall Street is always telling publicly traded companies to bring in that money no matter what. So if the mini is eating away at the sales of the larger iPad , so damn what. As long as every growing revenues enter into the cofers of Apple people shouldn't be bitchin.
I gave my iPad 2 to my gf and I picked up the 32 gig wifi only mini. AWESOME. Now wait until the mini gets the retina treatment and that A6 chip next year. DAMN!
post #3 of 38
Surely the question that should have been asked is: if the iPad mini wasn't available, would you have bought a standard iPad instead?

Surely that's the only way to measure cannibalisation?
post #4 of 38
1000 survey answers is likely far from statistically sound when you considered that tens and hundreds of thousand iPad have been sold in the past few weeks.

That said, I suspect the comment about fears being overblown are true. Yes the iPad 4 numbers might be down a bit but that could be simply that folks already got the 3 and see no reason to change from a device that is still under the base warranty.especially when we don't know if this Fall release was a change in calendar or the start of a new six month cycle.

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A non tech's thoughts on Apple stuff 

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post #5 of 38
I'm surprised to see the new to platform buyers higher for iPad than iPad mini. Also surprised the other tablets are growing while the Kindle Fire interest is decreasing.

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"The real haunted empire?  It's the New York Times." ~SockRolid

"There is no rule that says the best phones must have the largest screen." ~RoundaboutNow

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post #6 of 38
Two different parallel universes exist apparently. In one universe we see articles like this one and others showing Apple is just as popular and powerful as it ever has been. In the other universe Apple is finished, dead and buried with its stock price plummeting the company into oblivion. Choose your universe and live there? Is there no reality for Apple?
post #7 of 38
How about people who already own one iPad, like the format.. and are purchasing a second for spouse or kids? Thats completely new business, from existing customers
post #8 of 38
Quote:
Originally Posted by charlituna View Post

1000 survey answers is likely far from statistically sound when you considered that tens and hundreds of thousand iPad have been sold in the past few weeks.
That said, I suspect the comment about fears being overblown are true. Yes the iPad 4 numbers might be down a bit but that could be simply that folks already got the 3 and see no reason to change from a device that is still under the base warranty.especially when we don't know if this Fall release was a change in calendar or the start of a new six month cycle.

With 1000 as the sample size and a 99% confidence level you get a margin of error of just over 4%. With a confidence level of 90% you get a margin or error of just 2.6%.

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"There is no rule that says the best phones must have the largest screen." ~RoundaboutNow

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"The real haunted empire?  It's the New York Times." ~SockRolid

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post #9 of 38
Quote:
Originally Posted by skyzlmt View Post

How about people who already own one iPad, like the format.. and are purchasing a second for spouse or kids? Thats completely new business, from existing customers

This.

 

This is parallel to the people who owned an iPod circa 2005 and bought iPod Mini's/Nano's/Shuffle's for other situations.   I'm hemming and hawing about buying a Mini (I have a 2 Wifi) vs a 'iPad 4'.   However,  after holding the mini at BestBuy, I saw it as the perfect tweener between my 4s and a MBA (which for me is more useful than an iPad, primarily due to my job.  But a MBA, iPhone, and a mini, seems to be the right 'travel anywhere' kit

post #10 of 38
Quote:
Originally Posted by SolipsismX View Post

I'm surprised to see the new to platform buyers higher for iPad than iPad mini. Also surprised the other tablets are growing while the Kindle Fire interest is decreasing.

I think the Kindle Fire was a flash in the pan last holiday season. What will be interesting is what kind of following Microsoft can build; if they can edge out Samsung in market share it will be very good for Apple. Being in the dominant position with multiple platforms fighting for the scraps is a powerful spot.

As for cannibalization, if I were to be honest, I think the previous "disappointing" quarters of iPad sales indicates that there really is a market for the smaller form factor, and that will likely be the primary target going forward. That complicates things for the platform in several ways though, since it would seem that the UI will need to be tweaked for a Retina experience. Maybe coding for 5 different screen sizes isn't that much of a problem though. (Many of my iPad apps would actually be better on a smaller screen-- inefficient screen utilization for 9.7".)
post #11 of 38

I don't get what the split between new and existing purchasers tells us about cannibalization. I know this is probably the easiest figure to measure, and that's why it is always used, but in my eyes it does not mean anything with regard to the cannibalization matter.

 

I am an existing purchaser (iPad 1), and I got a mini now. So am I a cannibalization case or not? You can't tell. Only I can because I know I would have gotten a full-size iPad around this time or maybe later (but the iPad 4 would have been pretty compelling), but I would definitely not just given up on tablets or moved to Android, Kindle or whatever due to my existing ecosystem. So yes, I am a cannibalization case. 

 

And I've got a friend who never owned a tablet but was planning to get one. He considered the full-size iPad or a Nexus (7 or 10). But now he's getting a mini, saving a few bucks over the standard iPad that he would probably have gotten. So he is also a cannibalization case.

 

So the split between existing and new buyers is totally irrelevant. q.e.d.

post #12 of 38
Quote:
Originally Posted by lkrupp View Post

Two different parallel universes exist apparently. In one universe we see articles like this one and others showing Apple is just as popular and powerful as it ever has been. In the other universe Apple is finished, dead and buried with its stock price plummeting the company into oblivion. Choose your universe and live there? Is there no reality for Apple?


Reality is what is left when you stop believing in it.

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

 

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

 

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post #13 of 38
Quote:
Originally Posted by SolipsismX View Post


With 1000 as the sample size and a 99% confidence level you get a margin of error of just over 4%. With a confidence level of 90% you get a margin or error of just 2.6%.


So, a lower confidence level gives you a lower MoE?

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 #14 of 38

Doubt Apple is worried. So they may lose out a bit in profit margin on some iPad Mini sales that may have been 9.7" iPad. But selling more is more important in the medium term. Having a larger installed base will reinforce iOS lead in software development for tablets. Two screen sizes (one pixel-doubled over the other) means better optimised Apps for screen size than Android where a number of resolutions have to be taken into account.

post #15 of 38

First-time potential iPad Mini buyer here.  I've not considered a larger iPad, I really want the smaller one.
 

Problem is, stock is incredibly restricted right now at the local Apple Store... they can promise nothing. Yesterday, I was told by one salesperson to arrive every morning, an hour ahead of opening time, and there'd be a slim chance of a first-come, first-served grab, because stock comes in nightly.  But my spouse followed those instructions today and this story was refuted by a manager.  Stock does not necessarily come in overnight, it can arrive at any time of day.  He added that even employees are waiting to purchase one.  Not to be cynical, but that does not bode well for "trickling down" to potential customers like me.

 

Anyone have any bright ideas on how to acquire one (16gb white WiFi) in time for Christmas?  That doesn't involve inflated third party pricing or dodgy sourcing?

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post #16 of 38
Quote:
Originally Posted by charlituna View Post

1000 survey answers is likely far from statistically sound when you considered that tens and hundreds of thousand iPad have been sold in the past few weeks.
That said, I suspect the comment about fears being overblown are true. Yes the iPad 4 numbers might be down a bit but that could be simply that folks already got the 3 and see no reason to change from a device that is still under the base warranty.especially when we don't know if this Fall release was a change in calendar or the start of a new six month cycle.

Absolutely false. Depending on the confidence level you choose, 1000 answers is enough to reduce the margin of error to a few percent.

The real problem with surveys like this is not sample size - it's ensuring a representative sample.
Quote:
Originally Posted by lightknight View Post


So, a lower confidence level gives you a lower MoE?

Yes. Start here:
http://en.wikipedia.org/wiki/Margin_of_error#Different_confidence_levels
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Gatorguy 5/31/13
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post #17 of 38
Quote:
Originally Posted by PScooter63 View Post

First-time potential iPad Mini buyer here.  I've not considered a larger iPad, I really want the smaller one.

 
Problem is, stock is incredibly restricted right now at the local Apple Store... they can promise nothing. Yesterday, I was told by one salesperson to arrive every morning, an hour ahead of opening time, and there'd be a slim chance of a first-come, first-served grab, because stock comes in nightly.  But my spouse followed those instructions today and this story was refuted by a manager.  Stock does not necessarily come in overnight, it can arrive at any time of day.  He added that even employees are waiting to purchase one.  Not to be cynical, but that does not bode well for "trickling down" to potential customers like me.

Anyone have any bright ideas on how to acquire one (16gb white WiFi) in time for Christmas?  That doesn't involve inflated third party pricing or dodgy sourcing?

Like anything else that's in high demand, you have to shop around. Amazon usually offers good prices on Apple products (although their prices for the Mini are high right now). Check all the retailers who have it. Search online. It happens every year - Cabbage Patch Dolls, Furbies, Wii consoles, etc. You might get lucky - or you might have to order one and put a picture in a box under the tree.

And next year, don't wait until the last minute to buy a high demand item.
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post #18 of 38

Interesting that they only seemed to ask about cannibalization of the ipad4.  I have brought two ipad minis, one instead of ipod touch and the other instead of ipad 4. Both are cannibalization - but the actual impact on Apple depends on if I improved their profit margin, or reduced it.

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Household: MacBook, iPad 16gb wifi, iPad 64gb wifi, iPad Mini 32gb, coming iPhone 5S, iPhone 4S 32gb, iPhone 32gb, iPod Touch 4th gen x1, iPod nano 16gb gen 5 x2, iPod nano gen 3 8gb, iPod classic...
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post #19 of 38

I was at a Sams Club yesterday, and got to see and hold an iPad Mini for the first time. All I can say is wow. This is a really nice device! Especially, when you compare it to the 7" Android tablets close by - one can clearly see the screen real estate one gets with the Mini.

 

The form factor is so much nicer too...

 

I own an iPad 3 and my wife has the original iPad (hand-me down). This would be a really nice present for her. However, I could easily justify having a smaller iPad myself.

 

I'm sure Apple is selling these like hotcakes. Let's hope they get their stock levels up, so there is enough to go around to all the consumers who want one.

post #20 of 38
Quote:
Originally Posted by AppleInsider View Post

Analyst Katy Huberty said although iPad mini sales are clearly cannibalizing some full-size iPad sales, she believes concerns over this trend are "overblown."

Come on, Katy. Name names. Exactly who is that promoted those overblown concerns?
post #21 of 38
Quote:
Originally Posted by quinney View Post


Come on, Katy. Name names. Exactly who is that promoted those overblown concerns?


here's one:

 

"Cannibalization occurs when a potential iPad buyer is swayed towards the iPad Mini -- because of the lower price or any other factor," said Sameer Singh of Tech-Thoughts in an email today. "So if the iPad Mini did not exist, those buyers would have bought the larger iPad."

 

According to Singh, the iPad Mini will cannibalize sales of the standard 9.7-in. iPad to the tune of around 50%. In other words, 50% of the buyers of the iPad Mini would have, failing the availability of the smaller 7.9-in. tablet, bought a full-sized Apple tablet instead."

 

And another:

 

"Previously, Wu forecasted that the iPad mini would cannibalize a portion of sales of the new iPad. Wu's revised his predictions with sales for Q4 to go down to 23.5 million units, which is lower from the previous estimate of 25 million. Wu believes that the larger 9.7-inch iPad sales will see a decline as consumers tend to lean towards tablets with the smaller 7-inch displays."

 

And yet another"

 

"UBS (UBS) cut its price target on Apple (AAPL) to $700 from $780 on Friday but maintained its “buy” rating.

Shares of the Cupertino, Calif.-based tech giant slumped some 3% to $513.

The brokerage firm also lowered its outlook on Apple device sales in the March, June and September quarters, cutting out a total of five million iPhones and two million iPads due to the possible cannibalization of the new iPad by the iPad mini as well as a softer build rate."

 

I think the it was starting to sound like the general consensus was that iPad Mini sales were going to cannibalize iPad sales in a negative way because so many stories were coming out about it.

 

To me it looks like Cook is trying to keep iOS market share while maintaining gross revenue, even if margins take a hit.


Edited by island hermit - 12/17/12 at 10:33am
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post #22 of 38

Two numbers really jump out at me from the "Purchase Intentions by Brand" chart.

 

1. Other Tablet dropping from 24% to 5%.  Looks very bad for RIM and the other no-hopers.

 

Just a wild guess here, but I don't think RIM will be around as an independent corporation in a year.

They're following the same end-of-life trajectory as Palm.  Too little, too late, consumers won't buy.

 

 

2. Microsoft Surface 12%, twice that of Google Nexus.  Microsoft is too big to die (quickly.)

 

Another wild guess: Surface RT sales will quickly taper off after the first month, as will sales of

Surface with Windows 8 Pro after it's released.  Whatever pent-up demand there is, for a

Microsoft tablet, will be satisfied.  The novelty and sympathy factors will wear off and both

Surface models will be utter sales duds.  Ballmer will say that sales are "moderate" ad nauseam.

 

Of course, Microsoft will keep selling both Surface models.  To avoid losing face.  Hoping sales

will eventually pick up, say, by the 3.0 release.   It's just another cost of doing business.  Just the

price Microsoft is willing to pay in order to keep up the appearance of knowing what they're doing.

The Windows + Office + Enterprise businesses will easily cover their Surface division losses.

Same as it ever was.

 

They'll keep shipping Surface because it allows them to cross off all those marketing check-boxes.

You know, the check-boxes on the list they came up with when they tried to respond to iPad.  

"Looks good on paper.  Ship it."

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post #23 of 38
I guess my sale could be considered cannibalization. If the mini did not exist, I would have probably purchased the iPad4. (NO PRICE HAD NOTHING TO DO WITH MY DECISION!)

I also wonder why everyone assumes that Apple makes less profit on the Mini? It very well may be the same profit level due to the higher component cost of the retina diaplay, larger batteries, and more powerful processor.

I do believe that the Mini is the smallest tablet that can be made to still get the full tablet experience. I see sales of the iPad declining and sales of the Mini increasing for the foreseeable future for this reason. A thinner, lighter iPad with a narrowed bezel might help them sale against the Mini, but it is still going to be less portable...

Also, as stated before, the iPad 4 coming out so soon after the iPad 3 will definitely limit it's sales because I would think few people would find the iPad 4 to be a big enough of an upgrade from the ipad 3....

Although I do know three people who own an iPad 3 that bought a Mini....
post #24 of 38
Quote:
Originally Posted by SolipsismX View Post


With 1000 as the sample size and a 99% confidence level you get a margin of error of just over 4%. With a confidence level of 90% you get a margin or error of just 2.6%.

Damn you beat me to it.

post #25 of 38
Quote:
Originally Posted by sranger View Post

I guess my sale could be considered cannibalization. If the mini did not exist, I would have probably purchased the iPad4. (NO PRICE HAD NOTHING TO DO WITH MY DECISION!)

I see this is more like dimorphism than cannibalism. Take the Darwin Finches and feeding on cacti as an example. If you had the same number of finches and cacti the food source would be lower because they are fighting for the same part of the cacti and the finches have to struggle, but if you have them going for different parts of the cacti both types of finches can thrive without competing for the same resources.
Quote:
I also wonder why everyone assumes that Apple makes less profit on the Mini? It very well may be the same profit level due to the higher component cost of the retina diaplay, larger batteries, and more powerful processor.
I do believe that the Mini is the smallest tablet that can be made to still get the full tablet experience. I see sales of the iPad declining and sales of the Mini increasing for the foreseeable future for this reason. A thinner, lighter iPad with a narrowed bezel might help them sale against the Mini, but it is still going to be less portable...
Also, as stated before, the iPad 4 coming out so soon after the iPad 3 will definitely limit it's sales because I would think few people would find the iPad 4 to be a big enough of an upgrade from the ipad 3....
Although I do know three people who own an iPad 3 that bought a Mini....

There are a couple of reasons. One, I think they stated in the last earnings call that their profit margin would be going down. Two, it's a cheaper device so even if the profit margin is the same they would have sell more of the higher end models and/or sell more units to match the profits. Still, I don't think it's an issue because all signs point to Apple selling more units to more people for a much larger total revenue and profit than had the iPad mini not existed at all.

"The real haunted empire?  It's the New York Times." ~SockRolid

"There is no rule that says the best phones must have the largest screen." ~RoundaboutNow

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"The real haunted empire?  It's the New York Times." ~SockRolid

"There is no rule that says the best phones must have the largest screen." ~RoundaboutNow

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post #26 of 38
Quote:
Originally Posted by SolipsismX View Post

I'm surprised to see the new to platform buyers higher for iPad than iPad mini. Also surprised the other tablets are growing while the Kindle Fire interest is decreasing.

Surface, Galaxy and Nexus tablets are taking market share away from someone, and its not Apple, not in statistically significant volume anyway. The obvious loser appears to be Amazon and Other.

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post #27 of 38

Huberty said these numbers show her that the cannibalization risk Apple faces with the iPad mini is "manageable."

 

Is this not a silly thing to say? 'cannabalization' is just a word for some strange imaginary concept. There is nothing to 'manange'. 

post #28 of 38
Quote:
Originally Posted by sranger View Post

I guess my sale could be considered cannibalization. If the mini did not exist, I would have probably purchased the iPad4. (NO PRICE HAD NOTHING TO DO WITH MY DECISION!)
I also wonder why everyone assumes that Apple makes less profit on the Mini? It very well may be the same profit level due to the higher component cost of the retina diaplay, larger batteries, and more powerful processor.
I do believe that the Mini is the smallest tablet that can be made to still get the full tablet experience. I see sales of the iPad declining and sales of the Mini increasing for the foreseeable future for this reason. A thinner, lighter iPad with a narrowed bezel might help them sale against the Mini, but it is still going to be less portable...
Also, as stated before, the iPad 4 coming out so soon after the iPad 3 will definitely limit it's sales because I would think few people would find the iPad 4 to be a big enough of an upgrade from the ipad 3....
Although I do know three people who own an iPad 3 that bought a Mini....



Agreed.  I bought an iPad3 a few months before the 4 came out.  Yes, it has the much faster processor, but for what I use it for (and most people methink), the iPad4 is basically an iPad3 with the lightning connector.

I think they came out with the iPad4 so soon simply because they wanted to start the migration to the new connector ASAP and jettison the old legacy connector.

post #29 of 38
Quote:
Originally Posted by AnalogJack View Post

Huberty said these numbers show her that the cannibalization risk Apple faces with the iPad mini is "manageable."

 

Is this not a silly thing to say? 'cannabalization' is just a word for some strange imaginary concept. There is nothing to 'manange'. 


Why is it imaginary?

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post #30 of 38
Quote:
Originally Posted by SolipsismX View Post

Also surprised the other tablets are growing while the Kindle Fire interest is decreasing.

 

I think the so-so-ness of the Fire cost Amazon some good will plus there was probably a good level of geek interest that transferred over to the Nexus.  Plus this is "intentions" and not actual sales.

post #31 of 38

What I expected, the new size would attract people outside of those who would be attracted to the standard version. Expanding the potential sales customer pool.

 

Oh and chalk up another iPad3 owner that is open to buying a mini but is quite satisfied with the 3 thankyouverymuch. I'd be getting a mini for it's unique attribute of increased portability versus the standard size.

post #32 of 38

Apple has said over and over that they love making products that cannibalize their own products.

 

It's much better to cannibalize yourself then have a competitor do it for you.

post #33 of 38
The very non scientific feedback i got from my loca apple store is that the mini is outselling the ipad4 2 to 1. Even if there is some cannibalisation, we have the potential to see a huge ipad number in q4.

But personnaly i think the mini is so popular because its cheaper and makes it a more affordable "gift" in the holiday season. The ratio may changed in january.
post #34 of 38
Quote:
Originally Posted by SockRolid View Post

Two numbers really jump out at me from the "Purchase Intentions by Brand" chart.

1. Other Tablet dropping from 24% to 5%.  Looks very bad for RIM and the other no-hopers.

Just a wild guess here, but I don't think RIM will be around as an independent corporation in a year.
They're following the same end-of-life trajectory as Palm.  Too little, too late, consumers won't buy.


2. Microsoft Surface 12%, twice that of Google Nexus.  Microsoft is too big to die (quickly.)

Another wild guess: Surface RT sales will quickly taper off after the first month, as will sales of
Surface with Windows 8 Pro after it's released.  Whatever pent-up demand there is, for a
Microsoft tablet, will be satisfied.  The novelty and sympathy factors will wear off and both
Surface models will be utter sales duds.  Ballmer will say that sales are "moderate" ad nauseam.

Of course, Microsoft will keep selling both Surface models.  To avoid losing face.  Hoping sales
will eventually pick up, say, by the 3.0 release.   It's just another cost of doing business.  Just the
price Microsoft is willing to pay in order to keep up the appearance of knowing what they're doing.
The Windows + Office + Enterprise businesses will easily cover their Surface division losses.
Same as it ever was.

They'll keep shipping Surface because it allows them to cross off all those marketing check-boxes.
You know, the check-boxes on the list they came up with when they tried to respond to iPad.  
"Looks good on paper.  Ship it."
Forget the MSFT surface numbers shown for purchase intent. Once people actually see them, read the reviews on the hardware and performance, as well as the reviews on the horrible OS, they will quickly lose interest. It is mostly uninformed consumers that are even thinking about te Surface.
post #35 of 38
I'm curious about something....

Apple offered 1 iPad. Now they offer the iPad Mini. If not for the iPad Mini...wouldn't those same users pick the bigger iPad if they were gonna get one?

Isnt that cannibalizing? Taking sales from the other one?
post #36 of 38
Quote:
Originally Posted by jroc View Post

I'm curious about something....

Apple offered 1 iPad. Now they offer the iPad Mini. If not for the iPad Mini...wouldn't those same users pick the bigger iPad if they were gonna get one?

Isnt that cannibalizing? Taking sales from the other one?

Yes, that is what is meant by a companying cannibalizing its own products. A company is more than happy to do if the result in additional profits exceeds that of any profit lost from the cannibalization. Apple has been very aggressive with cannibalizing its products before a competitor can eliminate that product. The iPhone cannibalizing the iPod is probably the greatest example of this.

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"There is no rule that says the best phones must have the largest screen." ~RoundaboutNow

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"There is no rule that says the best phones must have the largest screen." ~RoundaboutNow

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post #37 of 38
Originally Posted by jroc View Post
Apple offered 1 iPad. Now they offer the iPad Mini. If not for the iPad Mini...wouldn't those same users pick the bigger iPad if they were gonna get one?

 

Thing is, plenty of people weren't going to buy the iPad at all, either because it was too small, too large, too heavy, etc.

 

Apple made a smaller one, sticking their net further out into the stream to catch some of that fully lost revenue. If some of their old coverage slips into the new, at least it's an Apple product.

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post #38 of 38
Quote:
Originally Posted by jroc View Post

I'm curious about something....

Apple offered 1 iPad. Now they offer the iPad Mini. If not for the iPad Mini...wouldn't those same users pick the bigger iPad if they were gonna get one?

 

Many did buy the larger iPad because it was the only choice in an Apple device.  

 

However, many decided to buy an Android 7" tablet instead(*), because they wanted the smaller form factor.   That's partly why Apple decided to do the Mini.

 

(*) Or in addition to the larger iPad.   Somewhere there's a chart that shows how many Americans own both iPads and 7" Android tablets / readers.  Have to look for it.

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