Analysts expect iPad Mini to cannibalize standard iPad sales by 15-20%

By on October 18, 2012, 5:30 PM

After years of rumors, Apple is finally expected to launch a smaller version of its iPad next Tuesday, October 23. Although the device is technically still unconfirmed, various leaks suggest that it will have a 7.85-inch display and may come in several variants starting for as low as $250. 

Armed with those details, analysts have already begun to predict how the new tablet will perform over the holiday shopping season.Unsurprisingly, the consensus seems to be that the iPad Mini will do well -- how well, of course, depends on who you ask.

Apple has reportedly ordered over 10 million units for the fourth quarter, and Topeka Capital analyst Brian White expects the company to sell between five and seven million of those devices. Similarly, Bill Choi of Janney Montgomery Scott believes Apple will move about six million iPad Minis this year.

Piper Jaffray's Gene Munster expects a solid showing for the new device, but his outlook is a tad more conservative. Munster predicts that Apple will sell 25 million iPads over the holidays with about 20 million being full size iPads and five million of them Minis. He previously estimated that the company would move 21 million large iPads, but he reduced that figure to account for cannibalization from the new slate.

"We believe that the smaller iPad could cannibalize one million regular iPad units in December or a rate of cannibalization at 20%," Munster said. "[So] for every five million smaller iPads, you lose one million standard iPads." By comparison, Choi believes Apple will sell 25.5 million iPads with the Mini eating 15% of the original's sales. He noted that he foresees minimal cannibalization risk to the standard iPad and iPod touch.

Apple iPad Mini mockup by Nickolay Lamm

User Comments: 7

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ReederOnTheRun ReederOnTheRun said:

I'd definitely trade in my ipad for a mini version

1 person liked this | Tekkaraiden Tekkaraiden said:

Is it really cannibalizing sales when Apple gets the sale either way?

Guest said:

That's the definition of canabalization, it always refers to displacing your own product. If the mini iPad were to take away sales from a competitor it would be eroding the competitor's market share.

Guest said:

"for every five million smaller iPads, you lose one million standard iPads"

even this iPad mini cannibalize iPad sales up to 20%, but let see how much profit generated by Apple? I bet no matter how normal iPad's sales down by 20%, iPad mini sales will more-than-enough to cover the normal iPad losses

1 person liked this | danhodge danhodge said:

There is a quote in the Steve Jobs biography that explains this, which I really like (I'm not an Apple fanboy, don't worry), and I remember the jist of it:

'If you don't cannibalize your own sales, someone else will instead'

Basically meaning they can afford to cannibilize their own sales, because if they don't Microsoft or Asus (I mention them because of their new Padfone 2) could create something better instead. So really, they are trying to keep the iPad alive and modern.

2 people like this | mario mario, Ex-TS Developer, said:

iPhone cannibalized the iPod. iPad cannibalized the Macs. iPad will cannibalize iPads?

Yet Apple is taking more revenue year by year.

Did analysts analyze this kind of irrelevant stuff 6-7 years ago? Did anyone complained iPod mini/nano would cannibalize the original iPod?

RajeGera RajeGera said:

This is not cannabilization of Ipad orginal sales.This one is to compete with other samller tabs from Samsung,Sony,Acer,Asus,Google and many more other companies.Sale of Ipad mini will overall boost the sale of apple tablets.

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