iPad mini is cannibalizing iPad sales: analyst

iPad mini is cannibalizing iPad sales: analyst

Summary: Analyst trims iPad sales, claiming that the petite iPad mini is cannibalizing sales, but iPhone 5 sales are expected to be very strong.

TOPICS: Apple, iOS, iPhone, iPad

Predictions that Apple's new iPad mini would cannibalize sales of the full-sized iPad seem to be coming true, according to one analyst.

Based on information received from supply chain sources, Sterne Agee analyst Shaw Wu is lowering his iPad sales estimates for this quarter from 25 million to a more conservative 23.5 million.

"iPad mini demand remains strong," wrote Wu in a research note, "but shipments appear limited by supply constraints. On the other hand, build plans for iPad appear to have been reduced likely due to some cannibalization by iPad mini."

When it comes to the iPhone 5, Wu is more optimistic, raising sales estimates from 47.3 million to 47.5 million. His rationale for this is based on improving yields and availability.

Earlier this month Wu reduced the Mac outlook from 5.1 million to 5.0 million. It's not a massive trim, but this is below the analyst consensus for Mac sales, which is in the region of 5.2-5.3 million.

Wu also lowered his revenue estimate for this quarter slightly, down to $54.4 billion from $54.6 billion, while at the same time raised gross margin from 38.5 percent to 38.7 percent, and keeping earnings per share unchanged at $13.70.

Image source: Apple.

Topics: Apple, iOS, iPhone, iPad

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  • The 'analyst' is correct this time.

    The 'analyst' is correct this time. Nobody will buy a mini and a full size iPad but only one of those... Now that Surface RT is in the market, 10 inch ipad will be pushed out of enterprise, school /college and other consumer markets.
    • Really?

      "Now that Surface RT is in the market, 10 inch ipad will be pushed out of enterprise,...."

      I seriously doubt that. The Surface Pro may very well be able to do that, but replacing one tablet with limited enterprise functionality with another just doesn't seem reasonable to me.

      As far as the original blog post stating that iPad mini sales are cannibalizing iPad sales... the word DUH comes to mind.
    • Changed your moniker again!

      Now why did you do that?
      John L. Ries
    • Huh?

      Actually the reverse may be true. While Surface Pro [the one that is Windows x86 based and can join a domain] will help some companies because it will be less administration [join a domain is like any PC] this will do nothing for the iPad as the iPad requires totally separate management in an enterprise. Sys admins want to control what they do and what they put on a tablet [either Mac, Windows or other] and having to separately administer multiple platforms is a pain. Same thing goes for schools. Need to control them.
  • iPad mini is cannibalizing iPad sales: analyst

    We called this one when they launched the iPad mini.
    • Loverock-Davidson's prediction could have been made by any ten year old.

      Simple logic. If there are two products offered by a single company which essentially do the same thing, consumers will choose just one product rather than both based upon other criteria (i.e. cost, size, weight, ex cetera)

      This was not one of your more insightful comments, Loverock.
      • PS. The real question to be asked is

        Has the iPad Mini cannibalized sales of other seven inch tablets or even other tablets in general?
        • A good question

          And yet another question:

          Has the iPad Mini nipped sales of larger form factor tablets from Amazon (8.9-inch display), Barnes & Noble (9-inch display) and Google (Nexus 10) in the bud?
          Rabid Howler Monkey
          • So just to be clear

            It IS okay to cannibalize your own stuff as long as cannibalize's your competitors stuff or stops them from cannibalizing your stuff?

            I just want to be very clear on this because we were told very loudly and very clearly that MS was very stupid to get into the tablet market since this might cannibalize Windows 8 licenses.

            Quite frankly, it is astounding how convoluted the logic needs to be to explain how the exact same decision is stupid for MS but brilliant for Apple. Sometimes I suspect that the logic is far simpler: MS stupid, Apple brilliant, no matter what.
          • Saying it over and over again doesn't make it true. One more time.

            Microsoft was criticized for competing with its hardware partners.
          • Saying it over and over again doesn't support your lie

            I provided supporting evidence. You provide nothing but repetition of your lie.
          • Yep. The article criticizing Microsoft

            for competing with its own hardware partners and how it's going to come back and bite them. In your reality, but you saw the word Windows in that article and ignored everything else pertaining to hardware partners, got your strawman all dressed up accordingly, and nailed him to the post, then strutted around with the peacock feather in your hat.
          • Yep, the article you didn't understand

            The article that said this:
            "Microsoft may not be pleased to see a competition between its own products"

            Crawl back under your bridge, troll.
          • You mean like the competition between Windows 8 and Windows 7?

            Or maybe between Windows 7 and Vista? XP?

            Exactly who is trolling here? It sure doesn't appear to be Baggins_z
          • I think you argued with him too long

            I do that too on occasion (and not just with him), but it doesn't seem to help.
            John L. Ries
          • No you didn't. You just made a claim phrased as a question

            Unfortunately, it was the wrong question. #JeopardyFail
          • Your desire for clarity is noble, too bad your post is totally unclear.

            "It IS okay to cannibalize your own stuff as long as cannibalize's your competitors stuff or stops them from cannibalizing your stuff?"

            What the Hell does that mean?

            You can't "cannibalize" your competitor's sales. Taking a competitor's sale for yourself is the whole point of business.
          • It's not the whole point of business

            Rather, you're trying to sell your own stuff as profitably as you can, regardless of what else your customers buy.

            We just assume (properly), that if someone bought an Acer tablet last year, he's probably not going to buy an iPad this year.
            John L. Ries
          • Doesn't seem to help

            Toddy, you seem to be always confused. :)

            Microsoft will still sell their licenses to OEMs. At least until those OEMs decide to move to another platform. So whatever they do themselves is irrelevant. Microsoft just can't do hardware and system integration.

            Instead of wasting time, money and resources, and demonstrating to others what they can't do, it's more productive to focus on their successful areas, like service hosting.
          • Clear as mud!

            "It IS okay to cannibalize your own stuff as long as cannibalize's your competitors stuff or stops them from cannibalizing your stuff?"

            HOW exactly does one "cannibalize" their competitor's sales?

            BTW who said it was bad for MS to get into the tablet business? Well other than some die hard ABMers... who are just as bad as the die hard ABAers.