iPad mini is a cannibal, but it creates more demand than it consumes

iPad Mini Cannibalization Survey

Apple’s (AAPL) new iPad mini will cannibalize sales of the company’s full-size iPad. It goes without saying. What remains unclear, however, is whether or not that’s a bad thing. According to BOM estimates, Apple’s margins on the iPad mini are in the same ballpark as margins on its pricier tablets. And according to a recent survey conducted by financial services firm Cowen Group, the iPad mini does much more good than harm.

In Cowen’s survey of 1,225 adults in the United States, 12% said they plan to purchase an iPad mini within the next year and a half, AllThingsD reports. More than half of those who plan to purchase an iPad mini said it would be their first tablet, and 83% said the slate will not replace another device. Of the 17% who claimed the iPad mini would replace another device, only 29% said it would replace a 9.7-inch iPad.

“The iPad mini creates more demand than it cannibalizes,” Cowen analyst Matthew Hoffman said. “Since 52 percent of the mini intenders in our sample did not own a tablet of any type, we see it successfully positioned as likely to penetrate new entry-tier segments. [The iPad mini] will no doubt take some iPad ’4′ sales, but its low price also looks like an important tool to capture new consumers’ attention.”

Source:
AllThingsD
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