iPad mini

That chomping sound you hear is the iPad mini eating into the sales of its older sibling. Unnamed sources have told Digitimes that Apple shipped 12.5 million iPad minis last quarter that accounted for roughly 64% of all iPads shipped. The reported iPad mini shipment numbers would give Apple’s 8-inch tablet a significant edge over the rival Google Nexus 7 tablet, which Digitimes‘ sources say has totalled around 4.5 million units shipped since its launch last summer. Earlier rumors have indicated that Apple might be working on two newer versions of the iPad mini for fall release: A more expensive version with a full Retina display and a cheaper version that could be priced competitively with the Nexus 7 and the Amazon Kindle Fire HD.

One of the big knocks on Apple’s iPad mini is that it’s priced significantly higher than rival tablets such as the Google Nexus 7 and the Amazon Kindle Fire HD. MacRumors points us to a new research note from KGI Securities analyst Ming-Chi Kuo claiming that Apple has apparently taken this criticism to heart and is now working to produce a cheaper version of the iPad mini that will cost between $200 and $250 when it releases. In particular, Kuo writes that “to cut costs, Apple might push for lower component prices, use a more advanced process to produce the A5 processor, simplify metal casing production, remove the rear camera, cut storage to 8GB and find more component suppliers to lower costs.” From the sound of things, it seems that Apple is taking a similar approach to producing a cheaper iPad mini that it’s taken with producing a cheaper iPhone by trying to figure out how to create a product at a lower cost that doesn’t sacrifice quality.

More potential bad news for Apple investors on Wednesday: shipments of the iPad mini could drop by as much as 30% in the second quarter. According to unnamed supply chain sources speaking with Digitimes, Apple’s manufacturing partners will ship 20% to 30% fewer iPad minis this quarter than they did between January and March due to “lacking demand in the market.” According to the report, customers are waiting for the second-generation iPad mini with a Retina display to launch, and are therefore not interested in the first model, which was released just this past November. Digitimes states that Q2 iPad mini shipments are expected to fall to between 10 and 12 million units from about 15 million in the March quarter.