iPad Mini to eat into bigger brother's sales, analyst says

Piper Jaffray analyst Gene Munster believes that every 5 million iPad Mini unit sales will result in a reduction of 1 million larger iPad unit sales.

The iPad Mini could hurt the larger iPad's unit sales figures, according to one analyst.

Piper Jaffray analyst Gene Munster wrote to investors recently, telling them that he believes the iPad Mini will boast a 20 percent cannibalization rate on regular iPad sales.

"For every five million smaller iPad [sales], you lose one million standard iPads," Munster wrote in a note, according to All Things Digital.

Although that might sound like bad news for Apple, it might not actually be. As long as the company can maintain high margins on its iPad Mini, the actual net gain on profits could soar during the fourth quarter. On the revenue side, if the company's pricing is right, the 1 million in lost iPad sales for every 5 million iPad Minis could be quickly offset.

That theory could be put to the test by the end of this year. Apple is believed to have ordered over 10 million iPad Mini units for the fourth quarter. Topeka Capital analyst Brian White expects Apple to sell between 5 million and 7 million of those units by the end of the fourth quarter.

That is, of course, if Apple actually launches the iPad Mini. Rumors have been swirling for months that the company will unveil a new slate, but Apple has stayed tight-lipped on its plans. Earlier this week, Apple announced that it will be holding a press event on Tuesday , saying that it has "a little more to show you." Although it's nearly a guarantee that the event is being held to showcase the iPad Mini, Apple hasn't confirmed that.

If and when the iPad Mini launches, it's expected to offer a 7.85-inch screen and several variations for customers to consider. It's believed that the cheapest iPad Mini, boasting 8GB of onboard storage and Wi-Fi-only connectivity, will ship for $249.

CNET's live coverage of Apple's event next Tuesday
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About the author

Don Reisinger is a technology columnist who has covered everything from HDTVs to computers to Flowbee Haircut Systems. Besides his work with CNET, Don's work has been featured in a variety of other publications including PC World and a host of Ziff-Davis publications.

 

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