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Post by Apple II+ on Oct 2, 2012 7:32:55 GMT -8
I could see iPad Mini pricing with a higher profit margin than iPad. If so, it could increase EPS growth.
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Post by mbeauch on Oct 2, 2012 19:46:25 GMT -8
I could see iPad Mini pricing with a higher profit margin than iPad. If so, it could increase EPS growth. It could have a higher GM, but if it takes away an ipad sale it is a hindrance to EPS, not a benefit. EX: ipad3 $500-Gm 35% = $175 Mini pad $300 - GM 50% = $150 I don't see anything good there. The only way is to overcome by volume which is possible, but I just happen to believe the ipad is a perfect size. It is something that would take a couple of qtr's to sort out. If someone buys because they prefer then it is a sale gain. We shall see.
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Post by Red Shirted Ensign on Oct 2, 2012 20:15:33 GMT -8
The ipad is a perfect size for most uses, I agree. But for pure consumption( email, Ebooks, messages, demos one on one,) a smaller version would be "more perfect". The Commodore has a Kindle Fire she was given as a door prize. It is "purse size" and while she dislikes the junky build quality, the slowness, the lack of a good ecosystem, the Fire,rather than the ipad2 goes out of the house with her many times for business meetings and for just keeping up on the go.
I've played with it, and the ONLY thing I see value from it is the size....at times.
The iPad mini will kill in this space...incremental sales will increase..
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Post by renee on Oct 2, 2012 20:33:45 GMT -8
I note that all of the participants in this particular discussion are male. Just wanted to point out to you that, Imho, the demand for ipad mini would be off the charts because it would fit into many standard size pocketbooks. I have an ipad 2 and find myself using a less attractive bag everyday so I can take it with me. Looking forward to a fashion liberation when mini can come with me in one of my regular purses. For this convenience, I would buy a second smaller ipad and gladly pay the same price as ipad2.
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Post by adamthompson32 on Oct 2, 2012 21:19:32 GMT -8
I could see iPad Mini pricing with a higher profit margin than iPad. If so, it could increase EPS growth. Not sure I follow. Increasing EPS growth compared to when? I don't think well ever see increasing EPS growth again for AAPL, unless a disaster occurs and growth falls off a massive cliff in the near term before growing again. I can't see that happening but if it does we're all screwed. As for margin, I suppose it's possible iPad mini will have a higher gross margin % than regular iPad but gross margin $ will be much lower per Mini unit than regular iPad unit due to the radically lower ASP ($200-300 less?). Overall, the opportunity here is for the mini to radically grow the tablet market which should be accretive to Apple's net earnings even if margins come down. Edited to say I didn't see Mark's comment on this before I posted. Sorry for being redundant. But I disagree completely about anyone's ability to say the iPad's size is perfect. Had Apple first launched an 8" ipad a couple years ago and then rumors swirled constantly today about a 6" Mini everyone would be saying the 8" iPad is perfect. Bottom line on this is that it is beyond logical to have several different sizes. Apple knows this so they're doing something about it. Smart move. It's obvious. The tablet market is in for some astronomical growth in the next couple years and various screen sizes will sell like crazy.
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Post by Apple II+ on Oct 2, 2012 21:46:08 GMT -8
I can't see an iPad Mini ASP $300 less than iPad. I'm thinking $100. Maybe $200. Call it $150. Let's say iPad ASP goes up a bit to $550 and iPad Mini ASP is $400. Using 35% and 50% margin figures yields $192.5 for iPad and $200 for iPad Mini.
EPS is growing. Whether the growth rate goes up or down, as long as there is EPS growth, that growth itself can be greater or lesser than it would have been without an iPad Mini. A high enough iPad Mini ASP and margin could mean greater EPS growth.
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Post by adamthompson32 on Oct 2, 2012 21:53:12 GMT -8
I can't see an iPad Mini ASP $300 less than iPad. I'm thinking $100. Maybe $200. Call it $150. Let's say iPad ASP goes up a bit to $550 and iPad Mini ASP is $400. Using 35% and 50% margin figures yields $192.5 for iPad and $200 for iPad Mini. EPS is growing. Whether the growth rate goes up or down, as long as there is EPS growth, that growth itself can be greater or lesser than it would have been without an iPad Mini. A high enough iPad Mini ASP and margin could mean greater EPS growth. Using all your figures, I don't think we will ever get close to accelerating EPS growth going forward. The EPS base is too big for accelerating growth unless iPhone continues to double, iPad more than doubles, and several new categories for Apple are massive grand slam homeruns. With that said, the iPad mini will be accretive to EPS and is thus a good thing. I really think it can sell more units than the regular iPad and I expect the regular iPad to continue to grow.
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Post by davidcv100 on Oct 2, 2012 23:45:50 GMT -8
Wall Street JournalASIA TECHNOLOGY October 3, 2012, 3:20 a.m. ET Asia's Apple Suppliers Begin Mass Production on Mini iPadonline.wsj.com/article/SB10000872396390443635404578033684191275730.htmlBY LORRAINE LUK TAIPEI—Apple Inc.'s Asian component suppliers have started mass production of a new tablet computer smaller than the current iPad, people with knowledge of the situation said, as the Silicon Valley company tries to stay competitive against rivals such as Google Inc. and Amazon.com Inc. that are offering smaller, less-expensive alternatives to the iPad.
Two of the people said the smaller tablet will have a 7.85-inch liquid-crystal display with a lower resolution compared with the latest iPad model that came out in March.
In August, technology blog website AllThingsD reported that Apple was planning to hold a special event in October to unveil the smaller tablet. AllThingsD is owned by News Corp., as is The Wall Street Journal.South Korea's LG Display Co. 034220.SE +0.88% and Taiwan's AU Optronics Corp. 2409.TW -0.47% last month began mass production of the LCD screens for the new device, they said.
The standard iPad's screen measures 9.7 inches, and that size hasn't changed since the first model was released in 2010.
Apple representatives in the U.S. and Beijing didn't immediately respond to requests to comment.
Apple's smaller tablet comes at a time competition is intensifying in the fast-growing market segment. Since the original iPad was released, competitors have released devices in various sizes, with various technical specifications and prices. In July, Google—already Apple's biggest software rival with its Android mobile-operating system—launched the Nexus 7, a tablet with a 7-inch screen that sells for $199. Last month, Amazon released the latest models of its Kindle Fire tablets, with the entry-level model priced at $159. Apple's newest iPad, released in March, starts at $499.
The Wall Street Journal reported in February that Apple was testing a smaller tablet. In July, people familiar with the matter told the Journal that Apple's suppliers were preparing to begin mass production of the smaller tablet in September.
Analysts said a smaller tablet could help Apple stay competitive in the increasingly crowded market. Christine Wang, analyst at Daiwa Capital Markets in Taipei, said that she expects a smaller Apple tablet to sell at lower prices than the current iPad. It would appeal to those consumers who find the iPad too heavy or too expensive, she said.
"Many people use the iPad to play games and watch videos, but they cannot hold it with one hand," said Ms. Wang.
Market-research firm IHS iSuppli has forecast that the global tablet sales will surge 85% this year to 126.6 million units. Last year, the iPad held a dominant share of roughly 60% of the global tablet market.
—Ian Sherr in San Francisco contributed to this article.
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Post by mbeauch on Oct 3, 2012 7:30:40 GMT -8
I can't see an iPad Mini ASP $300 less than iPad. I'm thinking $100. Maybe $200. Call it $150. Let's say iPad ASP goes up a bit to $550 and iPad Mini ASP is $400. Using 35% and 50% margin figures yields $192.5 for iPad and $200 for iPad Mini. EPS is growing. Whether the growth rate goes up or down, as long as there is EPS growth, that growth itself can be greater or lesser than it would have been without an iPad Mini. A high enough iPad Mini ASP and margin could mean greater EPS growth. Not sure I follow you. I used $500 & $300, a $200 difference. The cheapest iPad is where the mini would take sales. Me thinks you are fudging the numbers to try and get a desired result. Don't forget that this would be a new product, so counting on 50% GM is asking a lot.
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Post by Apple II+ on Oct 3, 2012 7:41:48 GMT -8
Using all your figures, I don't think we will ever get close to accelerating EPS growth going forward. The EPS base is too big for accelerating growth unless iPhone continues to double, iPad more than doubles, and several new categories for Apple are massive grand slam homeruns. With that said, the iPad mini will be accretive to EPS and is thus a good thing. I really think it can sell more units than the regular iPad and I expect the regular iPad to continue to grow. We're probably just having a semantic difference. So, first some definitions. Although negative acceleration, or deceleration, is still acceleration, I take acceleration to mean positive acceleration for this discussion. Unless EPS goes flat or shrinks, you have positive EPS acceleration. i.e. any EPS growth is by definition acceleration. I have no doubt that you agree that EPS will continue to grow for the foreseeable future. But I suspect you're focusing on the rate of growth decreasing. That would be decreasing acceleration, which is not the same as deceleration, but rather is still positive acceleration. BTW, I didn't actually argue for accelerating growth in my prior posts, just more growth with an iPad Mini than without. But I do actually see EPS growth continuing.
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Post by Apple II+ on Oct 3, 2012 7:52:55 GMT -8
Not sure I follow you. I used $500 & $300, a $200 difference. The cheapest iPad is where the mini would take sales. Me thinks you are fudging the numbers to try and get a desired result. Don't forget that this would be a new product, so counting on 50% GM is asking a lot. Desired result? You bet! But I'm not fudging beyond what I think is reasonable. adam suggested a $200-$300 difference. I'm more in the $100-$200 camp, so I used $150 in my example. $500 iPad ASP is much lower than anything we've seen so far. The low was $538, but that's depressed due to iPad 2, which I think is going away. Within a year I don't think Apple will make previous generation iPads any more. There will only be an iPad and an iPad Mini. Thus the name change, New iPad instead of iPad 3. All this to say, iPad ASP is going up from $538 to say $550. I see $300 as the entry level iPad Mini, with $400 and $500 models as well as 3G/LTE models at even higher prices. That's how I get to a $400 ASP there.
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Post by drewbear on Oct 3, 2012 9:09:15 GMT -8
Within a year I don't think Apple will make previous generation iPads any more. There will only be an iPad and an iPad Mini. Good point. A year later, all iPads will have retina displays.
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Mav
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Post by Mav on Oct 3, 2012 11:44:23 GMT -8
Possibly. I mean hey, the iPad mini already has Retina pixel density covered with the 7.85" form factor. Just make bigger screens based on the iPhone, IIRC.
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Post by traitorjoe on Oct 3, 2012 12:27:45 GMT -8
I note that all of the participants in this particular discussion are male. Just wanted to point out to you that, Imho, the demand for ipad mini would be off the charts because it would fit into many standard size pocketbooks. I have an ipad 2 and find myself using a less attractive bag everyday so I can take it with me. Looking forward to a fashion liberation when mini can come with me in one of my regular purses. For this convenience, I would buy a second smaller ipad and gladly pay the same price as ipad2. Renee, this is an excellent point - I know numerous women who have stated exactly the same sentiment about the importance of something larger than a phone and smaller than current iPad to place in their purse For Mbeauch and others- you are missing point in assuming that price needs to be much cheaper in order to create a perfect stair step related to size. Apple wants to continue to own usage occasions in all tablet forms/factors as this segment grows to meet these users needs. I was in Consumer product goods for decades and this is how companies look at dominating a fast growing segment that they have the lead in - meeting all the current and new users needs, not worrying about hurting or cannibalizing your own current sales piece of the pie - They want the whole pie !!
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Mav
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Post by Mav on Oct 3, 2012 12:34:07 GMT -8
Btw, it's not just a gender thing. The 3rd gen iPad is comfortable enough to use _without_ a case, but when you add a decently-protecting one, it can get unwieldy in certain situations. A whole bunch of people would be very, very happy with a lighter, smaller, still-functional-enough smaller iPad. And the third-party accessory makers should be pretty jazzed too.
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Post by mbeauch on Oct 3, 2012 14:05:07 GMT -8
Th price will determine everything. You can't "shrink" it and expect to get the same price, consumers don't work like that. Sure, the well to do will buy just because they can, but the masses, the Nexus & Kindle buyers are fixated on price. If the entry mini is more than $300 I will be shocked.
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Mav
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Post by Mav on Oct 3, 2012 15:46:29 GMT -8
I'm thinking $299-$399 starting price, somewhere in that range.
Apple could employ a semi-premium components strategy. A6 chip, if no Retina Display. Good cameras. iPhone 5-esque design.
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Post by adamthompson32 on Oct 3, 2012 20:38:09 GMT -8
With iPad mini getting an Oct/Nov launch do we have staggered iPad launches every year (regular in March and Mini in November)? Does this have any implication for a possible iPhone mini in March/April (2013? 2014?) Is this a way for apple to further smoothe out seasonal demand while ramping volumes in both product lines to astronomical new heights?
I still don't want an iPhone mini at this time but I see this as a plausible strategy in the future.
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Post by ellsab on Oct 4, 2012 5:23:52 GMT -8
All this talk brings me to ask, why not a larger Iphone! For business people on the go all day, the current iphone is slick, awesome product, but I would be more than happy to sacfrice a larger (or thicker) unit if I can get a true full day usage on one battery charge. Just as we all think one size does not fit all for the Ipad, I also believe the same for the Iphone, larger unit with 12-15hrs would be perfect phone! There is definately a market between the Iphone and Ipad the gap is just too great.
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Post by adamthompson32 on Oct 4, 2012 6:34:45 GMT -8
All this talk brings me to ask, why not a larger Iphone! For business people on the go all day, the current iphone is slick, awesome product, but I would be more than happy to sacfrice a larger (or thicker) unit if I can get a true full day usage on one battery charge. Just as we all think one size does not fit all for the Ipad, I also believe the same for the Iphone, larger unit with 12-15hrs would be perfect phone! There is definately a market between the Iphone and Ipad the gap is just too great. Moot point if you are of the view that eventually iPad absorbs iPhone much like iPhone has absorbed most, if not all, iPod functionality. iPad may eventually become the true king of Apple's castle. We'll see where SJ's vision of convergence takes us.
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Post by davidcv100 on Oct 4, 2012 7:51:08 GMT -8
Suppliers see 'frustrating' yields building Apple's 'iPad mini,' supply constraints expectedBy Neil Hughes appleinsider.com.feedsportal.com/c/33975/f/616168/s/241f386c/l/0Lappleinsider0N0Carticles0C120C10A0C0A40Csuppliers0Esee0Efrustrating0Eyields0Ebuilding0Eapples0Eipad0Emini0Esupply0Econstraints0Eexpected/story01.htmDevelopment of Apple's rumored 7.85-inch iPad has been "no walk in the park for suppliers," according to one analyst, who has warned that supply will not likely be able to meet demand when the product launches. Brian White with Topeka Capital Markets said on Thursday that he has heard suppliers have found the specifications for Apple's so-called "iPad mini" to be challenging. As a result, yields on production of the device are said to have been "frustrating." White originally believed that Apple would launch its smaller iPad in September, but he said Thursday that the debut was pushed beyond his original expectation because of apparent yield issues in production. "Despite continued yield challenges, the supply chain feels the much anticipated iPad Mini is on track to reach acceptable volume levels for a launch over the next month," White wrote in a note to investors. "That said, we believe that supply constraints will initially hold back the full sales potential during the first month or so of the launch." Apple has seen similar issues with the iPhone 5, which launched last month in Apple's most aggressive global rollout ever. Estimated shipping times on the iPhone 5 remain at 3 to 4 weeks from Apple's online store in the U.S. White believes the iPad mini will debut with a price between $250 and $300. He expects Apple will sell between 5 million and 7 million units of the new, smaller tablet in the December quarter. "Despite the low price point, we expect Apple to maintain the iconic aesthetics of the current iPad and blow away what competitors are offering in this smaller form-factor tablet market." Mass production of the iPad mini is currently underway at Apple's suppliers in China, The Wall Street Journal reported this week. The new device is said to have a 7.85-inch display that is smaller and lower resolution than the current 9.7-inch iPad with Retina display. With production said to have begun on the iPad mini, a flurry of component leaks claimed to be from the new device have appeared online. Earlier Thursday, purported headphone jacks from the smaller iPad were discovered online, while a collection of parts including front and back panels, an LCD display and a nano-SIM tray were pictured on Tuesday.
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Post by artman1033 on Oct 4, 2012 7:54:00 GMT -8
Is there still a screen shortage? The new iPod touch and the iPod nano STILL do not show a shipping date. And folks say Apple is coming out with a NEW product, with a NEW screen size. And now we read that the iPhone 4, the iPhone 4s, and the iPhone 5 are ALL SOLD out. Time to come out with an all NEW product.
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Post by davidcv100 on Oct 7, 2012 20:06:22 GMT -8
WSJ: Buzz Building for Smaller Apple Tabletblogs.wsj.com/digits/2012/10/07/buzz-building-for-smaller-apple-tablet/By Lorraine Luk Apple hasn’t officially confirmed plans to launch a smaller tablet, but the buzz is already building. Some component suppliers to Apple in Asia say they have received orders to make more than 10 million units of the smaller tablets in the fourth quarter. That is roughly double the order that were placed for Amazon’s Kindle Fire tablets in the same quarter, these suppliers say. The figure indicates that Apple believes demand for the product will be strong, despite stiff competition in the market. Apple hasn’t responded to requests for comment on the smaller tablet dubbed by the industry as the iPad mini. The Wall Street Journal reported earlier this month that Asian component suppliers have already started producing the smaller 7.85-inch tablet. Apple hasn’t confirmed when the new device will be available, but AllThingsD, a sister publication of The Wall Street Journal, reported last month that Apple plans to unveil the smaller tablet later this month. Analysts say strong consumer demand for Samsung Electronics ’ 5.3-inch Galaxy Note and Amazon’s 7-inch Kindle Fire shows that there is demand for a smaller tablet. Apple currently offers only one size –the 9.7-inch iPads. “It makes sense for market leader Apple to extend its dominance in tablets with a smaller tablet,”said Capital Securities analyst Diana Wu. Although Apple is still the biggest tablet maker in the world, its share of the market has been slipping following the launch of Android-based products. According to market research firm iSuppli, Apple’s share of the worldwide tablet market was 69.6% in the second quarter, down from nearly 84% in 2010. The second-largest player was Samsung Electronics with 9.2% of the market in the second quarter. Analysts say the challenge for Apple will be to price the smaller tablet attractively in order for it to succeed. Amazon’s 7-inch Kindle Fire HD sells for $199 and Google GOOG -0.05%’s 7-inch Nexus 7 sells for $199. “iPad mini will be a big hit if Apple prices it below $300,” said RBS analyst Wanli Wang.
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Mav
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Post by Mav on Oct 7, 2012 20:09:58 GMT -8
And it will be a big failure if Apple prices it at $349...or, the unthinkable $399?
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Post by adamthompson32 on Oct 12, 2012 6:25:02 GMT -8
Yep.
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Mav
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Post by Mav on Oct 12, 2012 7:44:37 GMT -8
Woohoo!
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Post by drewbear on Oct 12, 2012 7:51:06 GMT -8
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Mav
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Post by Mav on Oct 12, 2012 8:08:54 GMT -8
I'm sure pricing remains a "concern" for certain pundits, bloggers and media.
And I'm about as sure I don't really "care", because there will be a meaningful price difference in between iPad 3 and the not-so-rumored iPad mini (which I'll refer to as "mini" from now 'til the event for pure convenience reasons).
Hoping Apple won't scrimp too much on performance (A6-like or even A5X derivative, though A5 would be acceptable with a correspondingly lower price point).
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Post by mbeauch on Oct 12, 2012 8:26:45 GMT -8
I'm sure pricing remains a "concern" for certain pundits, bloggers and media. And I'm about as sure I don't really "care", because there will be a meaningful price difference in between iPad 3 and the not-so-rumored iPad mini (which I'll refer to as "mini" from now 'til the event for pure convenience reasons). Hoping Apple won't scrimp too much on performance (A6-like or even A5X derivative, though A5 would be acceptable with a correspondingly lower price point). Mav, I do not believe Apple will release a product that could be perceived as low grade. It will run IOS6 and I would be incredibly surprised if it has less than the A5X. Price is of course the big deal. I do wonder about LTE. If this device is to be marketed for people on the go, then it would have to be available, just at a higher price. How much of a difference do you think there is between chips, $5 maybe?
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Mav
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Post by Mav on Oct 12, 2012 8:32:31 GMT -8
You may be right. No one really knows the processor cost but rumors have it in the under-$30 range, which would make sense given Apple's insane volumes. To me, if iPad new and iPhone 5 have LTE, iPad mini has at least a good shot of having LTE. A6 would blow everyone out of the water - though there might be a lingering concern about where that "leaves" iPad 3. I just sent a PM to pats asking him to Google around and find iPad's new forum. I doubt I'm the only one to PM him, but hopefully he can join us and provide some perspective.
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