Market Overview

Apple Building Mini iPhone?

The rumors of a "Mini" Apple product might be dead on, but they may not have anything to do with a smaller iPad.

Rather, they could involve a miniature iOS device that no one saw coming: a pint-sized iPhone.

"iPad Mini is not going to cut it because if you create an iPad Mini -- which would be a six- to eight-inch device -- that market is [a] very congested space," Trip Chowdhry, the Managing Director of Equity Research at Global Equities Research, told Benzinga. "Profitability is almost nonexistent."

Chowdhry said that he doesn't think it makes good sense for Apple (NASDAQ: AAPL) to reduce the size of the iPad and risk cannibalizing its existing market. "To me, it makes [more] sense to have two form factors on the iPhone," Chowdhry explained. "Even the current iPhone is considered to be very bulky. Why? To me, on average, a person in the Apple ecosystem also has an iPod and an iPad. If I have an iPad, I don't want to carry an iPhone at the current size -- I want a phone at half the size."

Further, Chowdhry called the idea of an iPad Mini "total foolishness" but referred to the so-called iPhone Mini as an asset to Apple because it would be a "complementary product to the iPad, which [has a] big form factor."

"I think [consumers] are going to look to smaller form factors for phones because, once you have a tablet, you don't need that big of an iPhone except in a developing market," said Chowdhry. "That's because in developing markets, most people cannot afford an iPad."

Ultimately, Chowdhry believes that if an iPhone Mini is produced it will arrive at half the size of the iPhone 4S.

"I think the market will be very huge," Chowdhry affirmed. "Without taking into consideration cannibalization -- [for] which we'll need some more research -- on the surface, an iPhone Mini would sell analogous in conjunction with an iPad. So if you had 65 million people that bought an iPad, you should assume that 65 million people would also buy an iPhone Mini. Why? Because small and big go hand-in-hand."

"Big and big," Chowdhry added, "is what customers don't want."

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Posted-In: Apple Global Equities Research iPad MiniAnalyst Color News Rumors Analyst Ratings Tech Best of Benzinga

 

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