Couple of quick questions:
a) Interesting they're not breaking it out between the two given substantially different models and price points?
b) The two questions about the Mini are i) does it cannabalize the higher margin "normal" iPad sales and ii) does it slow down Nexus/Fire Android tablets? If it does i) and not ii) then it's arguably a failure. If it does ii) and not i) it's a wild success. Without a break out here between the two models it's really hard to know how to judge these numbers.
I most interested in day 30 - 100 when the initial buzz wears off.
I would guess the majority of sales were the iPad Mini. I went in yesterday with my gf to buy a retina iPad, and the sales guy assumed we wanted the mini, which they were almost completely out of. When he understood we wanted a full size, that wasn't a problem - he didn't have to check their inventory count.
That doesn't say anything about cannabalization either way, just that I think there's a lot of Minis out there now
The message they're sending with this press release is "all of our iPads are brand new and popular, so you can't pick the stinky old ~wrong one~ this Christmas".
Furthermore, average selling prices for iPads have already been sinking. Apple's just giving customers another $200 cheaper option to capture that demand. And as long as they can stay the default no-brainer choice in customer's minds, they'll be fine.
Even using current run rate sales of the Nexus tablet, they would only be selling 3M a quarter. Apple sold 3M tablets in a weekend. If only 20% of the reported sales were for the iPad Mini, it is doubtful Apple will be outsold in the holiday quarter (even with giving competitors the extra month), especially considering its distribution reach. However, we'll never know, since neither Google nor Amazon release sales figures (Asus reported the Nexus number).
OTOH, I think everyone agrees that Apple is manufacturing constrained on these things. How long did it take to manufacture those 3M iPad minis? If it takes a month to make what sells in 3 days...
While I agree they are still heavily supply-constrained, the CapEx figures that Apple has released indicates they are significantly ramping up manufacturing capacity. They have sold more than 15M iPads in a quarter before. I would be surprised if they didn't have the capacity to sell 20-25M this holiday quarter.
A friend of mine has broken this down precisely in this manner, and come up with a 'cannibalisation estimate' [1] of 50%, using product-wise sales data from the Apple-Samsung patent tiff [2].
Comments
Couple of quick questions: a) Interesting they're not breaking it out between the two given substantially different models and price points? b) The two questions about the Mini are i) does it cannabalize the higher margin "normal" iPad sales and ii) does it slow down Nexus/Fire Android tablets? If it does i) and not ii) then it's arguably a failure. If it does ii) and not i) it's a wild success. Without a break out here between the two models it's really hard to know how to judge these numbers.
I most interested in day 30 - 100 when the initial buzz wears off.
I would guess the majority of sales were the iPad Mini. I went in yesterday with my gf to buy a retina iPad, and the sales guy assumed we wanted the mini, which they were almost completely out of. When he understood we wanted a full size, that wasn't a problem - he didn't have to check their inventory count.
That doesn't say anything about cannabalization either way, just that I think there's a lot of Minis out there now
The message they're sending with this press release is "all of our iPads are brand new and popular, so you can't pick the stinky old ~wrong one~ this Christmas".
Furthermore, average selling prices for iPads have already been sinking. Apple's just giving customers another $200 cheaper option to capture that demand. And as long as they can stay the default no-brainer choice in customer's minds, they'll be fine.
Even using current run rate sales of the Nexus tablet, they would only be selling 3M a quarter. Apple sold 3M tablets in a weekend. If only 20% of the reported sales were for the iPad Mini, it is doubtful Apple will be outsold in the holiday quarter (even with giving competitors the extra month), especially considering its distribution reach. However, we'll never know, since neither Google nor Amazon release sales figures (Asus reported the Nexus number).
OTOH, I think everyone agrees that Apple is manufacturing constrained on these things. How long did it take to manufacture those 3M iPad minis? If it takes a month to make what sells in 3 days...
While I agree they are still heavily supply-constrained, the CapEx figures that Apple has released indicates they are significantly ramping up manufacturing capacity. They have sold more than 15M iPads in a quarter before. I would be surprised if they didn't have the capacity to sell 20-25M this holiday quarter.
A friend of mine has broken this down precisely in this manner, and come up with a 'cannibalisation estimate' [1] of 50%, using product-wise sales data from the Apple-Samsung patent tiff [2].
[1] http://www.tech-thoughts.net/2012/10/ipad-mini-cannibalizati...
[2] http://allthingsd.com/20120809/apple-vs-samsung-trial-forces...
It could still be a huge success while satisfying both of the options you outlined.
It would really just depend on the extent of the cannibalization.