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Apple Shoots Itself in Foot with Mini, Reduces 9.7" iPad Orders

By - Source: DigiTimes | B 37 comments

Apple plans to ship more iPad Mini tablets than regular iPads in 2013.

The sometimes spotty DigiTimes reports that Apple is reducing its orders for the 9.7-inch iPad due to a cannibalization of the iPad Mini. The fruity company now expects to ship 33 million iPads in 2013 and a meatier 55 million iPad Mini 7.9-inch tablets in the same timeframe. Whoops.

According to the report, Apple originally predicted that the larger iPad would reach around 60 million units sold during 2013 while the iPad Mini would only see 40 million units sold. But given the smaller tablet's popularity (thanks to a smaller price tag, no doubt), Apple is now adjusting its 2013 orders. As noted, the iPad will see a decrease while orders for the smaller tablet will increase.

Unfortunately, the adjustments will likely affect the supply chains, sources claim. iPad panel suppliers including LG Display and backlighting unit (BLU) providers including Radiant Opto-Electronics will take a hit in both shipments and revenue. However LG is expected to make up for the loss by bumping up its overall tablet panel shipments in 2013.

Meanwhile, iPad Mini suppliers like AU Optronics and Coretronic – another BLU provider -- will see the opposite in 2013. Sources said that AU Optronics is already experiencing an increase in tablet shipments from less than one million to 1.7 million per month by simply entering Apple's supply chain. The added revenue for Coretronic will also allow the BLU supplier to increase its overall shipments in the tablet sector.

Apple introduced the iPad Mini back in October, a 7.9-inch tablet that's 23-percent thinner and 53-percent lighter than the third-generation iPad. Powered by Apple's new ARM-based A6X chip, it features the same number of pixels as the original iPad and iPad 2, 5MP iSight cameras, dual-band Wireless N connectivity, and more. Pricing ranges from $329 to $659 USD.

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  • 20 Hide
    christarp , March 8, 2013 2:15 AM
    I don't see how they are shooting themselves in the foot by opening up to a new market and getting more orders with two combined than just the original. Better to cannibalize your own customers with the changing market than letting another company take your customers.
  • 17 Hide
    bak0n , March 8, 2013 2:18 AM
    christarpI don't see how they are shooting themselves in the foot by opening up to a new market and getting more orders with two combined than just the original. Better to cannibalize your own customers with the changing market than letting another company take your customers.

    Because the same people who bought the mini for a lower price would have spent more purchasing the higher priced product, most likely not cross shopped.
  • 16 Hide
    gladosiri , March 8, 2013 2:25 AM
    Apple Mini has A5 processor with SGX543MP2 graphics, not A6X like iPad 4.
    Essentially smaller iPad 2, not iPad 3/4.

    And I wouldn't say that Apple is shooting themselves in the foot.
    They'll likely get more people from whom looking for 7 inch tablet from android instead.
    It's smarter choice.
Other Comments
  • 20 Hide
    christarp , March 8, 2013 2:15 AM
    I don't see how they are shooting themselves in the foot by opening up to a new market and getting more orders with two combined than just the original. Better to cannibalize your own customers with the changing market than letting another company take your customers.
  • 17 Hide
    bak0n , March 8, 2013 2:18 AM
    christarpI don't see how they are shooting themselves in the foot by opening up to a new market and getting more orders with two combined than just the original. Better to cannibalize your own customers with the changing market than letting another company take your customers.

    Because the same people who bought the mini for a lower price would have spent more purchasing the higher priced product, most likely not cross shopped.
  • 6 Hide
    victorintelr , March 8, 2013 2:20 AM
    So Apple is not actually shooting themselves but rather the market has shifted.....but is less profitable.
    We'll se if they'll have to drop the 10" ipad price to keep up (doubt so).
  • 3 Hide
    Supermuncher85 , March 8, 2013 2:24 AM
    Not necessarily. I bought the product because I was looking for a smaller tablet. Lower price or not, I would have not bought the larger tablet simple because it was cheaper. In fact if apple had not sold their mini, I would have most likely bought the nexus7 because the normal Ipad@10" is too big for my needs.

    Your example is like what the music industry uses all the time when they state that everyone who ever downloaded an illegal Mp3 would have instead bought the CD/LP for the full price which is just not true. Or see this TED talk on it http://www.ted.com/talks/rob_reid_the_8_billion_ipod.html

    Again I bought the mini because I wanted a sub 10" tablet, not because of the price.
  • 16 Hide
    gladosiri , March 8, 2013 2:25 AM
    Apple Mini has A5 processor with SGX543MP2 graphics, not A6X like iPad 4.
    Essentially smaller iPad 2, not iPad 3/4.

    And I wouldn't say that Apple is shooting themselves in the foot.
    They'll likely get more people from whom looking for 7 inch tablet from android instead.
    It's smarter choice.
  • 8 Hide
    fleeb , March 8, 2013 2:26 AM
    christarpI don't see how they are shooting themselves in the foot by opening up to a new market and getting more orders with two combined than just the original. Better to cannibalize your own customers with the changing market than letting another company take your customers.


    May be they were shooting themselves in the foot by claiming that tablets that are less than 10 inches in size suck, because after all, they all did the thorough research, engineering, and testing to make the claim and at the same time they made their company image of supposedly selling these premium gadgets. The mere act of opening to this market that is against this image they want to portray is already shooting themselves in the foot.
  • 6 Hide
    stickmansam , March 8, 2013 2:45 AM
    They also had lower overall unit sales 100 million projected vs 88 million actual

    Is this a sign of falling market share or falling overall tablet sales or just plain overestimation?
  • 4 Hide
    eklipz330 , March 8, 2013 2:47 AM
    i like the ipad mini's size and shape actually. it's a pretty looking device. i can't find a reason for a tablet, and even if i did, i'd probably go the nexus route. can't argue with their design choice though.
  • 1 Hide
    bustapr , March 8, 2013 2:51 AM
    the profit margin of the ipad mini isnt too much less than the big ipad also. its cheaper to make, hence its cheaper cost. if anything this was a smart decision to get into the smaller tablet market since their undoubtably making more money.

    fleebMay be they were shooting themselves in the foot by claiming that tablets that are less than 10 inches in size suck, because after all, they all did the thorough research, engineering, and testing to make the claim and at the same time they made their company image of supposedly selling these premium gadgets. The mere act of opening to this market that is against this image they want to portray is already shooting themselves in the foot.


    it was certainly stupid of them to have mocked this market in the first place, but it is in no way shooting themselves in the foot to open up to the market they initially mocked. theres an obvious growing market thats already much bigger than the interest in the bigger tablets. any company with half a brain could see the profits and it would be even more retarded to not jump into this pool of money. im not a fan at all of Apple, but I find it hard to think if this decision as being a bad one,regardless of the image they set up against the market.
  • 5 Hide
    fat_panda , March 8, 2013 2:56 AM
    Win or lose, I would appreciate it if Apple consider giving iOS a make over, or make some general improvements. It may not be a problem for tablets, but my iPhone sucks compared to Android phones. Only thing keeping me on iPhone 4S is my 2 year contract with Verizon.
  • 0 Hide
    chaospower , March 8, 2013 3:07 AM
    "Apple introduced the iPad Mini back in October, a 7.9-inch tablet that's 23-percent thinner and 53-percent lighter than the third-generation iPad. Powered by Apple's new ARM-based A6X chip, it features the same number of pixels as the original iPad and iPad 2, 5MP iSight cameras, dual-band Wireless N connectivity, and more. Pricing ranges from $329 to $659 USD."


    That is incorrect...
    The ipad mini is powered by an A5 chip. If it was powered by an A6X then really nobody would buy the regular ipad.
  • 0 Hide
    velocityg4 , March 8, 2013 3:18 AM
    I wouldn't be surprised if the actual profit per unit is the same as the regular iPad given that the iPad Mini is just an iPad 2 with a smaller screen. The iPad 4 has a high resolution retina display, twice the RAM, and a much faster CPU/GPU combo. The screen alone is much more expensive to make.

    Plus given the the iPad Mini is using two year old parts. That means that iPad Mini owners will have to replace them a year or two sooner than iPad 4 owners. Personally I think they should have made the mini with at least iPad 3 parts. There is no reason they couldn't have made it as powerful as the iPhone 5, it is larger.

    If it was as fast as the iPad 3 I might actually have bought the iPad 3. As it stands I remain tablet free. I don't care for the Android interface, the iPad 4 is too expensive for a gadget and the Windows RT tablets need some major apps.

    Perhaps I'll wait to see what Ubuntu comes up with. Frankly I want a file system and control over my tablet. I really don't like the idea of files being localized to certain apps and made inaccessible to others that can read the same file type.
  • -1 Hide
    goodegg , March 8, 2013 3:20 AM
    Dumb.

    So their projections were off a bit. That's not shooting themselves in the foot for filling a market size or price point. That's FILLING a market size or price point. The flip side to that is NOT putting out a smaller pad and everyone who wanted a smaller tablet doesn't buy an Apple product. THAT would be shooting themselves in the foot.
  • 5 Hide
    droidavenger , March 8, 2013 3:58 AM
    I remember legions of Apple fanboys who used to criticize 7" tablet and said this form factor was completely useless. How soon they have changed the tone once Apple has decided to make one. I think if Apple made a paper iPad and said it is extremely light, and will looks extremely cool they will praise it too.
  • 0 Hide
    ta152h , March 8, 2013 4:10 AM
    bak0nBecause the same people who bought the mini for a lower price would have spent more purchasing the higher priced product, most likely not cross shopped.


    No doubt there would have been some, but there would also have been many that would have gotten a smaller/cheaper tablet someplace else.

    I've seen many times when companies worry about less expensive products that can cannibalize their more expensive lines. It's always better to let that happen, because if the more expensive product has a deficiency that could be exposed in such a way, someone else will if you don't.

    Also keep in mind that the profit from the iPad isn't that important. Think of all the money Apple will get from milking the owner with the sales of other products that work with the iPad.

    More interesting to me is the number of iPads they expect to ship went from 100 million to 88 million. That's not good at all. I'm very curious as to why, but there's no good scenario for that, and the least bad (supply issues) is clearly not the reason.
  • 0 Hide
    williamf3000 , March 8, 2013 4:16 AM
    The profit per unit is not the same, but margins are still good for the mini.

    The iPad 4 does not have twice the memory.

    They could not use iPad 3 parts because the A5X uses too much power and would increase the weight and thickness of the mini.

    velocityg4I wouldn't be surprised if the actual profit per unit is the same as the regular iPad given that the iPad Mini is just an iPad 2 with a smaller screen. The iPad 4 has a high resolution retina display, twice the RAM, and a much faster CPU/GPU combo. The screen alone is much more expensive to make. Plus given the the iPad Mini is using two year old parts. That means that iPad Mini owners will have to replace them a year or two sooner than iPad 4 owners. Personally I think they should have made the mini with at least iPad 3 parts. There is no reason they couldn't have made it as powerful as the iPhone 5, it is larger.If it was as fast as the iPad 3 I might actually have bought the iPad 3. As it stands I remain tablet free. I don't care for the Android interface, the iPad 4 is too expensive for a gadget and the Windows RT tablets need some major apps. Perhaps I'll wait to see what Ubuntu comes up with. Frankly I want a file system and control over my tablet. I really don't like the idea of files being localized to certain apps and made inaccessible to others that can read the same file type.

  • 2 Hide
    jasongray , March 8, 2013 4:17 AM
    Tomshardware's Apple analysis is getting worse progressively. Apple's move into smaller sized tablets was preemptive to stave off the erosion of lower priced Android tablets. So sooner or later they were going to start losing 10' tablet sales to Nexus 7's and the like. The Mini brings them in at a similar price point and yes it cannibalizes some iPad 10' sales, that was foregone conclusion. But they're still selling a huge number of tablets and dominating the market through the Mini to a greater extent than they would have with just the 10' iPads. Problem?
  • 1 Hide
    cookoy , March 8, 2013 4:19 AM
    apple would definitely lose iPad sales to the smaller size tablets from other brands had apple not released the mini.
  • 1 Hide
    williamf3000 , March 8, 2013 4:20 AM
    You really have to question the value of an article in which the author does not even know what the specs are of the products he is discussing. At any rate, it would be shooting themselves in the foot, if Apple insisted on sticking with the incorrect assumption that the 10 inch is the one and only size that works. Apple created the market. Then the market did what all markets do, it changed. Apple is now adjusting to the change. Makes perfect sense to me. A company can innovate and create a market, but once it is created, it is driven by consumers, not by companies.
  • 1 Hide
    kartu , March 8, 2013 10:12 AM
    So total sales prediction went from 100 (60 + 40) down to 88 (55+33).
    As far as I remember Apple has sold 100 million tablets in 2012.
    Now they're going to sell 12% less, and that in a growing market.

    I guess something is missing in this story, simply"mini is cannibalizing" doesn't really cut it.
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