Apple Rumored to Sell Fewer iPads Than Expected in 2013
Apple (NASDAQ: AAPL) has reportedly reduced its full-year orders for the iPad, indicating that the company plans to sell fewer units in 2013 than previously anticipated.
According to DigiTimes, Apple thought that it could ship 100 million tablets before the year's end. Individually, the company planned to ship 60 million full-size iPads and 40 million iPad Mini units.
It would be an enormous accomplishment for the Mac maker to ship that many iPads, as it took Apple roughly two years to sell the first 100 million units. The iPad Mini is performing very well, however, which apparently gave Apple hope that it could set a new record.
Now "industry sources" have told DigiTimes that Apple only expects to ship 33 million full-size iPads and 55 million iPad Mini units. If true, Apple would send 88 million tablets to retail this year -- 12 percent less than anticipated.
By adjusting its overall shipments and the volume of each unit (iPad Mini sales are now expected to outpace the full-size model), Apple is sending the message that its original stance toward seven-inch tablets was dead wrong.
Steve Jobs was vehemently against the idea of building a smaller tablet. The Apple co-founder's initial pushback seemed to be a wise move, as it led to the creation of a multi-billion-dollar empire that continuously thwarted the competition.
The first, second and third-generation iPads have outsold every competitor on the market. Dell (NASDAQ: DELL), Hewlett-Packard (NYSE: HPQ), Samsung, Google (NASDAQ: GOOG), Amazon (NASDAQ: AMZN) and Barnes & Noble (NYSE: BKS) could barely compete.
Only after lowering prices to $200 and below are tablet manufacturers starting to make progress in this Apple-dominated market.
Even if Apple has lowered its internal expectations for the iPad, there is no reason to believe that sales are beginning to slow. Rather, it might simply be that Apple and/or its suppliers had far greater (and far more realistic) hopes for these iDevices.
If Apple sold just 50 million tablets this year, it would be fairly impressive. The new estimate (88 million) would set a new record for the firm -- and come very close to the number of iPhones Apple sold in 2011.
iPads are unlikely to outsell the iPhone during any given period. Smartphones are infinitely more popular than tablets, and are also much more replaceable. While tablets are built and promoted as PC alternatives, consumers think that smartphones are throwaway devices.
This attitude has helped the smartphone market stay young, but it could have limitations. A well-protected iPhone (ex: one that hasn't been dropped on cement) is likely to last more than the length of a two-year contract. Consumers are eager to upgrade anyway because of the added benefits (new features, a faster processor, an improved camera, etc.) of buying the latest iPhone.
If that changes -- if the annual upgrades start to lose their luster -- iPad sales could finally begin to exceed those of the iPhone.
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