Apple seen selling up to 6 million 'iPad minis' this holiday
If Apple were to sell a smaller 16-gigabyte iPad for $299 this holiday, one analyst believes the company would sell as many as 6 million units this holiday season.
Gene Munster with Piper Jaffray believes that Apple's rumored smaller iPad would be priced at $299 with 16 gigabytes of storage, given the company's $199 8-gigabyte iPod touch, and its $399 16-gigabyte iPad 2. Sandwiched right in the middle of those two existing products, he sees a smaller iPad cannibalizing 10 percent of existing iPad sales, but also taking away 30 percent of total Android tablet sales in the December quarter.
"We believe this implies that Apple could sell 4-6 million smaller iPads in the December quarter, assuming a holiday launch," Munster wrote in a note to investors on Monday. "If the launch occurs in (the fourth quarter), we believe the smaller iPad would add about 1% to revenue and (earnings per share) in December."
Munster had previously assumed that Apple would launch a so-called "iPad mini" in the first quarter of calendar 2013. That would be in line with the timeframe Apple has used to update its existing 9.7-inch iPad thus far.
But recent reports from The Wall Street Journal and Bloomberg have indicated that Apple is planning to launch a smaller iPad by the end of the year. The device is expected to feature a 7.85-inch display with a resolution of 1,024 by 768 pixels, using the same display technology as the iPhone 3GS.
Munster expects that Apple will introduce its smaller iPad at the same event that it will unveil its next-generation iPhone. He also expects that Apple will refresh its Apple TV set-top box, which he admitted "could make for a crowded event."
He believes that the launch of a smaller, cheaper iPad will eliminate two of the biggest features for Android tablet makers in price and size. He expects that going forward Apple will maintain a majority share of the tablet market, and may even increase its presence over the next four years.
Last week, analyst Brian White of Topeka Capital Markets issued a note that was even more bullish on the prospect of a smaller iPad. White said he believes that a new, cheaper iPad could prove to have an even larger market opportunity for Apple than the current iPad, given growth trends in developing countries like China and prospective sales to the education market.
Gene Munster with Piper Jaffray believes that Apple's rumored smaller iPad would be priced at $299 with 16 gigabytes of storage, given the company's $199 8-gigabyte iPod touch, and its $399 16-gigabyte iPad 2. Sandwiched right in the middle of those two existing products, he sees a smaller iPad cannibalizing 10 percent of existing iPad sales, but also taking away 30 percent of total Android tablet sales in the December quarter.
"We believe this implies that Apple could sell 4-6 million smaller iPads in the December quarter, assuming a holiday launch," Munster wrote in a note to investors on Monday. "If the launch occurs in (the fourth quarter), we believe the smaller iPad would add about 1% to revenue and (earnings per share) in December."
Munster had previously assumed that Apple would launch a so-called "iPad mini" in the first quarter of calendar 2013. That would be in line with the timeframe Apple has used to update its existing 9.7-inch iPad thus far.
But recent reports from The Wall Street Journal and Bloomberg have indicated that Apple is planning to launch a smaller iPad by the end of the year. The device is expected to feature a 7.85-inch display with a resolution of 1,024 by 768 pixels, using the same display technology as the iPhone 3GS.
Munster expects that Apple will introduce its smaller iPad at the same event that it will unveil its next-generation iPhone. He also expects that Apple will refresh its Apple TV set-top box, which he admitted "could make for a crowded event."
He believes that the launch of a smaller, cheaper iPad will eliminate two of the biggest features for Android tablet makers in price and size. He expects that going forward Apple will maintain a majority share of the tablet market, and may even increase its presence over the next four years.
Last week, analyst Brian White of Topeka Capital Markets issued a note that was even more bullish on the prospect of a smaller iPad. White said he believes that a new, cheaper iPad could prove to have an even larger market opportunity for Apple than the current iPad, given growth trends in developing countries like China and prospective sales to the education market.
Comments
Well, Munster was right about iPad 1 sales ;-)
(yes that was a joke because he was waaaay off)
If Apple builds it, the buyers will come! But it is amazing how this has taken a life of its own now. It started off with whispered rumors, then built up to supply chain leaks and annonymous informants, then to specification speculations.
Now we have sales forecasts for a thing that, for all intents and purposes, is not even vapor-ware. It is just rumor-ware for now.
This holiday season should be very interesting. Even if the rumors are wrong, there is till the new iPhone that I am eager to see.
$299? or $199?
If a Retina Display... I can see $299. if a iPhone 3GS display, I can't see the market buying it for more than $199 (and the iPod Touch moves to $149).
But it is an 8" device, so maybe people will go with 'bigger must be better')
Assuming 30% margin after all expenses... that's 0.5Billion in a quarter at $299 - at 1% earnings, that means Gene is expecting $50billion in Earnings the December quarter. That's 300% growth over last Dec 31st quarter. That seems high ( I would guess 100% growth would be 'in line'). Maybe he's putting CapEx in that quarter as well (cost of the assembly line), and that will pull down the quarter (I would think that would have come in the prior quarter).
But, not bad for an entry quarter.
Refresh to apple tv box? Did he miss the month of May? What could they possibly do? Maybe a new OS... But a new box? I highly doubt it.
Release it for $199 and call it The New iPod Touch. This breathes new life into the iPod line and diminishes the perceived role of the Nexus 7 and Kindle Fire to being iPod Touch competitors. Then Apple can just fight it out with the Microsoft Surface, since they'll be the only "real" iPad competitor at the 10" size. Kids (the biggest market for the current iPod Touch) will be delighted to have a larger form factor and more capability.
That was my exact thought ... This could be the next gen Touch ... Simple as that! If so my guess would be more than $199 but less than $299 or possibly a range of versions starting at $199. Apple don't have to be as cheap as Android tablets to sell more but the price can't be too high. I for one hope this is true now so that Apple mop up the low end of the market too with a quality product that would, like the iPhone, continue to feed new switchers into the Apple Eco system. Mac sales and higher end iPads can only benefit from such a move over time.
Either the mini is imminent or Apple is pulling a fast one to hide its true intentions.
Agreed and as I have said many times I still suspect an even larger iPad, the ... iPad Pro will make an appearance in a year or two. A larger version designed to be used at a desk but still portable if required. I would expect an Apple stylus too designed for the likes of CAD/CAM applications and Photoshop etc.. Perhaps two versions, 17" and 23".
I just love watching Apple mess with tech analysts heads: masterful.
Some of the rumours are borderline credible, but beware of Chinese insiders bearing purported Apple scoops -- those guys will clearly parrot just about anything.
I agree with your first part part but not the second regarding a stylus. Steve Jobs will be haunting anyone making a decision like that for a long time to come. I just don't see it (a stylus) happening especially on a larger screen where you have the real estate and resolution to magnify an area to work on it (a small portion at a time). Sorry but although I might agree on a larger touch screen (I think it is more likely in an OS X iMac type product) but have a hard time seeing it on any Apple device in the near future.
Point well made and taken!
It would be irresponsible for Apple to get into a price matching scenario. Any victory would be a Pyrrhic one, there's likely very little profit to be had at that price point.
Several who think the iPad mini is a bad idea seem to forget this. Currently, if you own an iPhone, why buy a touch? But if they release a larger screen, then it has appeal to a completely different user base.
As a side note- just made a half dozen typos on that paragraph. On my iPhone I make none. While browsing on the iPad rocks- Typing on the iPad sucks- I can't wait for a smaller screen (I'm 6'2 btw- so my fingers aren't little)
Apple's never about generating 'sales.'
Margins first. All other financial metrics are secondary.
They make an 8gb iPod touch for $199. Why not- 2 full years later, be able to make a $199 7"? Particularly if they use old 3GS non-retinas (which the touch is). I think it'll be retina and $249-$299 if they release, but $199 is easily profitable.
Quote:
Originally Posted by Carmissimo
If this is about generating sales, there's a much less expensive approach. Start by lowering the US price of the iPad 2 to $349. Then you update the Touch with a larger screen, let's say 4.7 inches. The Touch is overdue for an overhaul and I don't think Apple is ready to pull the plug on it.
Either the mini is imminent or Apple is pulling a fast one to hide its true intentions.
'less expensive'...
You don't understand what that means. as anantksundaram stated, less expensive means it has to be inexpensive to make, to maintain margins, and still be an amazing experience for 2+ years. 4.7" is an odd size in terms of iOS Geometries. which leads to the 'why' that dimension, which now we have to ask you... what pixel density do you see for this glass?
To be either Retina or non Retina with current geometries of LED displays, you'd have to make a whole new production line of glass. That's not 'less expensive' OR you would have to make a whole new geometry that is either not Retina or not 'double' some current geometry (doubling allows for the longest transition for apps and OS graphics elements), which would requires a a whole new set of iconography for the device, and that doesn't win you friends, or make apps less expensive.
so, in short, 4.7" would require a new LED glass substrate and/or a new geometry (something other than 3:2, 4:3). Unless there is a compelling reason you know of other than "I think that would be a great size," there are no production or UI drivers to use that size.
Apple always plays the long game. My suspicion is they hope to eliminate the 1024x768 geometry and non Retina Display devices (iPhone 3GS, iPad 1 and 2), before they change the geometry of the phone and iPod to 4ish inches. Hence my conclusion is that the iPad Mini will use iPhone 4 Glass .
My educated guess:
In the fall,
iPad 1 disappears
iPad Mini takes over with RD using iPhone 4glass (so the iPhone 4, 4s, 5 and iPad Mini all use the same glass) at $299 ($249 at the low end)
iPod Touch moves to $149.
In the Spring (2013)
Current iPad RD moves to $399
Next Gen iPad will come in at $499 with the similar features as the iPhone 5 (chipset, LTE, better batteries)
At the same time the iPad Mini gets an upgrade to LTE as well. and the current iPad Mini moves to $199.
In June 2013,
iOS7 is announced and the support for the 3GS/iPad1 is dropped.
In Sept 2013, the new iPhone and iPod Touch are announced at a new geometry at 4.small inches, using a new pixel density/technology.
In Spring 2014, a new iPad is announced at double the geometry of the new iPhone... maybe 9.5"
in June 2014,
1024*768 and the iPad 2 support is dropped in iOS8.
Apple may accelerate this (support for 1024x768 may drop in IOS 7.x) as they have wont to do in the past (killing the iPod Mini), but my guess is given the cost of glass, they will develop a glass foundry and milk it for 4 odd years (3GS glass is what, 5 years old).
Quote:
Originally Posted by Andysol
Several who think the iPad mini is a bad idea seem to forget this. Currently, if you own an iPhone, why buy a touch? But if they release a larger screen, then it has appeal to a completely different user base.
As a side note- just made a half dozen typos on that paragraph. On my iPhone I make none. While browsing on the iPad rocks- Typing on the iPad sucks- I can't wait for a smaller screen (I'm 6'2 btw- so my fingers aren't little)
I see Gamers., especially if it's a iPad 3 chipset and an RD display.
Like a phoenix from the fire, Apple is going to bring back the Newton...
How can Apple be seen to be selling a number of units of a product that doesn't even exist? I remember back in 2009 or so, Gene Munster said Apple would sell about 45 million "iPhone minis" for the year. Obviously, Apple never came out with an iPhone mini. Now he's onto iPad minis this time around. This man pulls theories out of his behind and this is considered helping investors. Can't he at least wait until an actual product is announced before prognosticating about it?
Quote:
Originally Posted by anantksundaram
Apple's never about generating 'sales.'
Margins first. All other financial metrics are secondary.
Apple is all about generating sales. They aren't a charity after all.
but if you mean that Apple doesn't design with 'generating sales' as their key factor then yes I agree. Going cheap and common is not Apple's game.