iPad Mini eating into iPad sales?

Apple isn't saying how many iPad Minis it has sold, but at least one analyst estimates the bulk of first-weekend sales were for the smaller device.

That means the iPad Mini may be taking away from some potential larger iPad sales, which could be negative for Apple if iPad Mini volumes aren't high enough to offset the lower selling prices. Apple is counting on the iPad Mini to address consumer demand for smaller tablets that have largely been dominated by Amazon, Samsung, and more recently, Google and Asus.

Apple earlier today said it had sold 3 million iPads over the weekend, doubling its previous iPad launch in March. However, it didn't break down how many of those sales were for the iPad Mini and how many were for the fourth-generation iPad.

Piper Jaffray analyst Gene Munster estimates Apple sold 2 million to 2.5 million iPad Minis, much higher than his previous estimate for 1 million to 1.5 million. He based that on line surveys, which showed that roughly nine out of every 10 customers was waiting for the iPad Mini rather than a full-sized iPad.

Munster said he remains comfortable with his estimate for $12.6 billion in overall iPad revenue in the December quarter. However, the mix and unit totals may shift depending on Mini availability.

"Specifically, units may increase driven by iPad Mini, but have a slight cannibalization effect, which, when factoring in the lower [average selling price], would result in revenue unchanged," Munster noted. "We are currently modeling for 25 million total iPads including 20 million full-sized iPads and 5 million Minis in December."

Meanwhile, J.P.Morgan analyst Mark Moskowitz agreed that most first-weekend sales likely were for the iPad Mini.

He expects the tablet to grab share from the $199 tablet market and hurt the PC and e-reader markets, with momentum continuing as the cellular versions of the iPad Mini and fourth-generation iPad become available later this month.

"Given the global economic uncertainty, we think price-sensitive users could gravitate toward an iPad mini instead of making a PC purchase. Our view is that the incremental use case is more differentiated for first-time tablet users. In tough times, unique or 'feel good' purchases can be more amenable to end users, which gives the edge to the tablet versus the PC, in our view," Moskowitz noted.

He also believes the iPad Mini could help the iPad become Apple's main growth market, rather than the iPhone.

"In our view, barring entry of another new category, Apple's iPad Mini could set the stage for the iPad product set to carry the growth baton in the future, particularly as iPhone growth momentum moderates," Moskowitz noted.