iPad sales skew even more toward mini

Gregg Keizer
22 January, 2014
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iPad sales shifted over the last year, with fewer buyers purchasing the aged iPad 2 and more choosing the lower-priced iPad mini, a research firm said today, citing a survey of 500 Apple customers.

“People moved up to the [iPad] mini, especially the mini with the Retina screen,” says Michael Levin, co-founder of Chicago-based Consumer Intelligence Research Partners (CIRP), when asked about the decline in sales of 2011′s iPad 2.

“The iPad mini was not just a small iPad, but also a cheap iPad,” Levin continues, referring to the $349 price of the original and the $479 of the Retina edition. The iPad 2 costs $449. “It was a means for people to get an iPad, both more portable and more affordable.”

According to CIRP’s survey of those who purchased an Apple product in the final quarter of 2013, just five percent said they had bought an iPad 2, down dramatically from 27 percent in 2012′s fourth quarter.

Other models also dropped in popularity after Apple started selling the iPad Air on 1 November and the high-resolution, Retina-equipped iPad mini on 12 November.

In 2013, the Retina iPad accounted for 13 percent of the Apple tablets purchased by those CIRP polled, down from 2012′s 43 percent as those buyers switched to the new and lighter – and same-priced – iPad Air, which in the two months remaining to it for the quarter snapped up a 41 percent share.

The original iPad mini fell from a 30 percent share in 2012 to 25 percent in 2013, but the mini total jumped from 30 percent to 41 percent on the back of the six-week sales stretch of the Retina iPad mini, which accounted for 16 percent of all Apple tablets, said Levin.

“Unbelievable,” Levin says, about the quick sales increases for the Air and Retina mini in just weeks. Together, the two new models accounted for 57 percent of all Apple tablets purchased in the fourth quarter.

The decline of the less-expensive iPad 2, the rise of the pricier iPad mini with Retina and a small trend toward SKUs with more memory – which cost more – across the board should translate into a higher ASP (average selling price) for the iPad line as a whole.

“We’ll see a healthy boost to the ASP [next week],” Levin predicts, talking about the 27 January earnings call Apple will host for Wall Street analysts. Levin forecast a five percent to 10 percent in the ASP for the fourth quarter.

In the last quarter for which Apple has reported sales figures – the one that ended 30 September – the iPad’s ASP was US$440, down 13.5 percent from the same quarter the year prior.

Using CIRP’s iPad purchasing poll numbers and adjusting for higher-storage sales as reflected in 2012′s fourth quarter, Computerworld pegged the iPad ASP increase at eight percent for the final quarter of 2013.

The ASP is important to Wall Street, although not to customers; the latter uses the number to gauge Apple’s margins, and thus profitability. The ASP has been in decline for nine straight quarters, which has concerned investors.

The ASP would turn upwards if Apple sold more larger-size iPads rather than the 7.9in mini. And that may be on the cards, according to researcher IDC.

Previously, IDC predicted that 8in and smaller tablets would peak this year at about 57 percent of the market, then slide back slightly the following years as more buyers opt for larger-screen smartphones.

“We expect larger-sized tablets to enjoy a modest resurgence as more people buy large-screened phones, eliminating the desire for a small-screened tablet,” writes analyst Tom Mainelli, in a research note.

Apple will hold its fourth-quarter earnings call Monday 27 January, starting at 2 pm PT (Pacific Time, 9 am Tuesday 28 January in Australia).

Apple’s two newest iPad models, the Air and Retina mini, accounted for nearly 60 percent of all its tablet sales in the fourth quarter, according to a research firm. (Data: Consumer Intelligence Research Partners.)

iPad sales chart

Apple's two newest iPad models, the Air and Retina mini, accounted for nearly 60 percent of all its tablet sales in the fourth quarter, according to a research firm. (Data: Consumer Intelligence Research Partners.)

by Gregg Keizer, Computerworld

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