1. Computing
Daniel Nations

Does Apple Care About the iPad Mini Cannibalizing Sales?

By November 1, 2012

Follow me on:

Analysts have been predicting cannibalized sales for the iPad Mini for months, with some estimates going all the way up to 50%. This would mean for every 2 Minis sold Apple would lose a full-sized iPad sale.

But does Apple care?

Think about this: Google and Amazon are willing to sell their 7-inch tablets at or below cost. Why are they basically giving their tablets away for free? Because they plan to make money selling those very same people apps, movies, music and books from their respective online stores.

Kindle Fire HD vs Google Nexus 7 vs iPad Mini

Apple priced the iPad Mini at $319, refusing to follow their competition down the path of sacrificing hardware profits for ancillary sales. They still make a healthy profit off the iPad Mini, and even if the cannibalization rate is as high as 50%, they'll gain more profit selling two iPad Minis than a single full-sized iPad. More likely, the cannibalization rate is in the 25% range.

But let's not forget that Apple also sells apps, music, movies and books. They may be sacrificing that one iPad sale, but they are making much more off the 2-4 iPad Mini sales and gaining more customers for the App Store, iTunes and the iBooks store. I don't think they are all that worried about exchanging the single iPad user for a small posse of potential customers.

The iPad 2 vs the iPad Mini: 5 Reasons Why the Mini Wins

No comments yet. Leave a Comment
Leave a Comment

Line and paragraph breaks are automatic. Some HTML allowed: <a href="" title="">, <b>, <i>, <strike>
  1. About.com
  2. Computing
  3. iPad

©2014 About.com. All rights reserved.