Analyst: iPad Mini to hurt sales of Windows 8 devices

Apple's diminutive new tablet will take a bite out of sales of new Windows 8 devices this holiday season, says Sterne Agee's Shaw Wu.

Apple's iPad Mini.
Apple's iPad Mini. Apple

The iPad Mini will cause major agita for Windows 8 device makers, according to Sterne Agee analyst Shaw Wu.

In an investor's note out yesterday, Wu said that the iPad's main rivals are not 7-inch Android tablets, as other analysts have asserted, but rather Windows 8 PCs and tablets.

"We continue to believe iPad Mini is the competition's worst nightmare and will likely slow down adoption of competitor tablets," Wu said in the note. "In particular, we believe this could end up being a very tough holiday season for Windows 8."

The analyst expects the Mini's $329 price tag to tempt buyers away from some of the new Windows 8 devices. As one example, he cited Microsoft's $599 Surface RT tablet, which he called "arguably overpriced." Some Apple watchers believe the iPad Mini itself is overpriced compared with other 7-inch tablets. But Wu feels Apple is simply following its usual strategy.

"This controversy reminds us of what happened with iPod Mini and iPod Nano," the analyst said. "Both predecessors were criticized as being overpriced but went on to do much better than expected. The key reason being high quality at a reasonable price, and we see something similar here.

The iPad Mini and the fourth-generation iPad reach consumers throughout 34 different countries today , including the U.S., the U.K., Canada, Italy, Japan, Korea, and Hong Kong.

iPad Mini units were available through pre-orders on Apple's Web site starting a week ago but quickly sold out. Apple currently shows a wait time of two weeks for the Wi-Fi-only version. The Wi-Fi plus cellular edition will be available in mid-November.

Updated 9:45 a.m. PT with details directly from investors note.

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