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:
) was thought to be the one company that could overcome any risk
of cannibalization. According to
, 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
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
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
more than three million units during their first weekend of
availability. This did not even include the
Based on the success of the old iPad, which
dominated the Chinese market
, as well as the iPhone 5, which , the iPad Mini could do very
well in that nation.
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.
(c) 2013 Benzinga.com. Benzinga does not provide investment
advice. All rights reserved.
Gain access to more investing ideas, tools & education.
Get Started on Marketfy, the first ever curated
& verified Marketplace for everything trading.