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

Published Nov 14th, 2012 2:02PM EST
iPad Mini Cannibalization Survey

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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.”

Zach Epstein
Zach Epstein Executive Editor

Zach Epstein has been the Executive Editor at BGR for more than 10 years. He manages BGR’s editorial team and ensures that best practices are adhered to. He also oversees the Ecommerce team and directs the daily flow of all content. Zach first joined BGR in 2007 as a Staff Writer covering business, technology, and entertainment.

His work has been quoted by countless top news organizations, and he was recently named one of the world's top 10 “power mobile influencers” by Forbes. Prior to BGR, Zach worked as an executive in marketing and business development with two private telcos.