iPad Mini Will Cannibalize Big iPad Sales - InformationWeek
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Jacob Lopez
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iPad Mini Will Cannibalize Big iPad Sales

An analyst predicts that 20% of iPad Mini sales will cancel out full-size iPad sales. But that's okay with Apple, because all those iPad Minis will steal sales from the Amazon Kindle Fire and other Android tablets, and increase the "halo effect" for other Apple products.

According to Piper Jaffray analyst Gene Munster, Apple's rumored iPad Mini will cannibalize as many as 1 million current-gen iPad sales during the fourth quarter.

His prediction is that 20%, or one out of every five units sold, will take place of one full-size iPad. Although his prediction might be true, this isn't necessarily bad news for Apple. Every iPad Mini sold is one Kindle Fire or one Nexus 7 that's not in the hands of consumers.

Apple doesn't mind a little cannibalization as long as the product eating the other carries its logo. CEO Tim Cook said so himself during a 2011 first-quarter conference call when asked if the iPad was cutting into Mac sales.

"Yes, I think there is some cannibalization, but I also think there is a halo effect," said Cook, explaining that some of those users will later decide to buy a Mac. "If this is cannibalization, it feels pretty good," he joked.

In the long run, even if an iPad Mini cuts into the iPad's sales, it introduces users to the iOS and apps, which is precisely what Apple wants--anything, as long as it's not Android.

Munster also seems to believe that despite the cannibalization, the iPad Mini will boost Apple's overall tablet sales.

Some, such as BYTE's own Larry Seltzer, disagree. "Apple neither makes nor loses money when someone buys a Kindle Fire. But if the [cannibalization] is true, and they're losing iPad 'Biggie' sales then it's a matter of which is more profitable to Apple."

There are enough consumers to sell plenty of both tablets. As long as it means buying things from the Apple App Store and enticing users to switch to Mac while Android sales slow down, Tim Cook & Co. are a happy bunch. It seems Steve Jobs' desire to kill Android lives on.

The iPad Mini has been rumored for quite some time now, and is expected to debut during an Apple press event on Oct. 23 with a release date of Nov. 2.

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