Apple suppliers say iPhone 5 demand still strong, iPad mini cannibalizing 9.7" iPad
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.
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."
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.
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."
Comments
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 !
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?
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!
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.
I love the form factor of the mini and use it much more than I did my iPad 3.
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.
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.
Quote:
Originally Posted by crazy_mac_lover
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".
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?
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 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.
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 ..."
I wonder if the 11" MacBook Air cannibalizes sales of the 13" MacBook Air. As far as I can tell, not significantly.
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.
Apparently... all those iPad Mini sales are cannibalizing sales of Amazon and Android tablets....
More's the pity...