Did the iPad Mini Just Kill Off the iPad 4?
Sales of the iPad 4 were not expected to be harmed by the smaller, sleeker and cheaper iPad Mini. As the king of touch screen devices, Apple (NASDAQ: AAPL) was thought to be the one company that could overcome any risk of cannibalization.
According to Reuters, that may not be the case. The publication reports that Sharp (one of Apple's largest display suppliers) has significantly reduced the production of screens for the full-size iPad.
Reuters' sources did not specify if the slowdown was caused by seasonal changes (Q1 sales are naturally lower than Q4) or the release of the iPad Mini.
However, Macquarie Research told Reuters that it expects sales of the iPad to drop 40 percent this quarter. Macquarie analysts estimate that Apple's total iPad sales (Mini and full-size models) will be large enough to weather the storm, so the declines may not seem as massive.
While Apple will not report its earnings results until January 23, early estimates suggest that the company may have shipped as many as 12 million iPad Mini units. Other, more conservative estimates indicate that the company may have shipped eight million units.
In either case, the iPad Mini provides Apple with millions of new sales opportunities. While the third-generation iPad was accused of having stale sales results (iPad 4 sales may be even lower), the iPad Mini is flying off store shelves.
This does not mean that Apple has cannibalized sales of the full-size iPad by releasing the iPad Mini. It could, however, mean that Apple simply sped up the death of the traditional iPad.
The problem with the tablet market is that it cannot go on forever. Unlike smartphones, tablets do not need to be replaced every 12 to 24 months. They are larger, faster and generally more reliable devices. Thus, tablets that are purchased today are likely to be fully functional three years from now.
This may be the primary reason why Apple released the iPad Mini. iPad sales began to peak with the second-generation model. After the iPad 3 arrived, consumers began to lose interest in Apple's tablets -- not because they weren't cool or lacked significant upgrades, but because they already owned an iPad.
By releasing the iPad Mini, many consumers have been compelled to, for lack of a better term, "downgrade." Others were simply intrigued by the lower price. Those who owned an iPod Touch (but not an iPad) may have also been persuaded, as the Mini presented an opportunity to upgrade.
Apple has not yet released individual sales figures for either the iPad Mini or the iPad 4. However, the company did say that the two tablets collectively sold more than three million units during their first weekend of availability. This did not even include the Chinese launch.
Nonetheless, investors continue to approach Apple with a degree of skepticism. The Mac maker has dipped below $500 again today. The stock is currently down roughly one percent.
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