The latest data from Display Search suggests that the iPad mini is cannibalizing iPad sales, and that Apple won’t sell as many larger iPads this year as it anticipated. Generally speaking, self-cannibalism is something Cupertino’s okay with… but they may not like the taste in their mouths nearly as much this time.
Tracking data published in the latest Mobthly TFT LCD Shipment Database for tablet sales in the first month of 2013, Display Search notes:
Shipments of 9.7”tablet PC panels collapsed, falling from 7.4 to 1.3M, while 7”and 7.9”panel shipments grew rapidly, from 12 to 14M. Shipments of 10.1”panels grew only slightly. The January panel shipment data may be an indicator for 2013, starting with Apple’s product mix shift. As we noted in December, Apple had planned to sell 40M iPad minis (7.9”) and 60M iPads (9.7”) in 2013. However, the reality seems to be the reverse, as the iPad mini has been more popular than the iPad. We now understand that Apple may be planning to sell 55M iPad minis (7.9”) and 33M iPads (9.7”) in 2013. At the same time, Samsung, Amazon, Google, ASUS and Acer are all eyeing the 7-9” segment to grab tablet PC market share, while many white box makers in China are also emphasizing the smaller size tablet PC.
Apple, of course, has always been open about not caring about cannibalism, as long as its one of their products cannibalizing another of their own products. When the iPad was released, there were fears that the tablet would cannibalize Mac sales: more Macs are being sold now than ever.
In fact, during January’s earnings call, Apple said straight out they viewed cannibalizing themselves to be a good thing:
Cannibilization is a huge opportunity for us. We never fear it because if we do, someone else will do it. iPhone has cannibalized iPod, that doesn’t worry us. iPad has on the Mac, and that doesn’t concern us.
In that example, Apple cannibalized itself with products that were more profitable than what they were cannibalizing. The difference here, though, is that according to Apple CFO Peter Oppenheimer, Apple makes less profit on every iPad mini sold than on every iPad sold.
So Apple’s selling fewer iPads, and more iPad minis, but making less profit on the iPad minis than it was on the iPads it was selling. If they sell more iPad minis, they can make up for that, but even so, this clearly isn’t the same kind of cannibal banquet Apple is used to.