iPad Shipments Lowered Because of iPad Mini Cannibalization?

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Sterne Agee's Shaw Wu has issued a new report on Apple, raising his iPhone unit estimates while lowering iPad estimates reports Apple 2.0. Additionally, Wu has cut his revenue estimates slightly while increasing his gross margin estimates for Apple's holiday quarter.

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Wu says iPad mini demand is strong but sales are limited by supply constraints and he sees the mini cannibalizing full-sized iPad sales. iPhone sales will grow because of improving manufacturing yields and increased availability.

We believe AAPL shares will likely continue to be volatile until year end due to non-fundamental factors including profit taking as AAPL as been an outstanding performer in 2012 where many are opting to lock in gains and fears of higher "fiscal cliff" tax rates next year. However, we believe as we enter 2013, investor sentiment will likely shift back to fundamentals. We are at the beginning of two big product cycles that will likely last 3-5 quarters and see margins poised to improve with greater scale and improving yields.

Tag: Shaw Wu

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103 months ago

Duh, Of course the mini is going to canibalize regular ipad sales. Just like releasing any new different sized or optioned model of product would do.


There was a rumour that the next iPhone comes in six different colours. I bet that will cannibalise sales of black iPhones and white iPhones.
Score: 9 Votes (Like | Disagree)
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103 months ago
What a dumb observation. That like saying 6ft bed Ford F-150's are cannibalizing the 8ft bed versions. Who cares?
Score: 5 Votes (Like | Disagree)
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103 months ago
Duh, Of course the mini is going to canibalize regular ipad sales. Just like releasing any new different sized or optioned model of product would do.
Score: 5 Votes (Like | Disagree)
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103 months ago
Better to be cannibalized by your own products.

This happened with iPod nano, and the iPod mini as well.
Score: 4 Votes (Like | Disagree)
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103 months ago

Better to be cannibalized by your own products.

This happened with iPod nano, and the iPod mini as well.

Well, you can't really be cannibalized by other people's products, can you?

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That's only true if sale of a regular sized ( :D) iPad is replaced by a sale of iPad Mini ( which we have no proof for or against), but i doubt it's the case. I think Apple is selling way more iPad Minis.

This is what is meant by cannibalization. People buying the iPad Mini instead of an established product from the same manufacturer.

Most companies try not to do this, but I really don't think Apple cares much. I'm sure they'd prefer everyone bought an iPad and an iPad mini, but it's more important that you buy any iPad instead of a Kindle/Nexus.
Score: 3 Votes (Like | Disagree)
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103 months ago

No it's not.

As stated before, Apple's margins on iPad mini are lower than on iPad. So cannibalization of the iPad by iPad Mini = less profit for Apple, and potentially unhappy investors.


"If you don't cannibalise your own products, someone else will". Don't know exactly who said it.
Score: 2 Votes (Like | Disagree)

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