The iPad sales number is the one that’s most likely to surprise us in Apple’s Christmas quarter report, which will be released on January 27th. The consensus expectation has recently converged to around 25 million units, with several analysts exhibiting a herd mentality as they seek safety in numbers. As usual, Wall Street analysts are about 2 million units below the indie analysts. But the thing that is fiendishly hard to forecast is what sort of iPads Apple sold during the quarter.
This is crucially important, because one of the biggest fears that investors have about Apple concerns its device average sales price (ASP) decline. iPads are more vulnerable to that decline than iPhones, which are heavily subsidized by operators in many markets.
One of the mysteries of the Christmas quarter was the iPad mini with Retina Display shortage. Did it end up driving some consumers towards the cheaper and older iPad mini or the more expensive iPad Air? Has the stiff tablet competition from Amazon and a cluster of Asian vendors changed consumer perceptions about tablet pricing in a way that moves the iPad mix shift towards the cheapest version? Are the families buying their second or third tablet favoring the cheapest iPad or venturing to the premium Air version and giving the old tablet to the kids?
The markets are now fairly certain that Apple is going to deliver 8% to 10% iPad unit growth from the previous Christmas period. But the ASP number is likely going to be more important than whether the shipments hit 24 or 25 million units. This is going to be a major indicator of how well Apple can defend its premium pricing strategy against a new generation of notably cheap Amazon and Android rivals that offer a lot better performance than they did in 2012.
