Customers don't care about cannibalization, but Apple will: By selling more iPad Minis at lower prices than full-fledged iPads, Apple may be gaining users -- 3 million to 3.5 million by Singh's estimate -- but it's losing revenue. Buyers of the iPad Mini, sans the tablet, would have instead purchased a higher-priced iPad, which generates more revenue for Apple.
But Apple could laugh all the way to the bank, according to IHS iSuppli, which last month said the profit margin for the iPad Mini was higher than that of the larger iPad.
And cannibalization, for better or worse, is something that Apple will have to learn to live with, if predictions by research firm IDC is on the money. Among its just-released 2013 predictions, IDC prophesied that up to 60% of the tablet market next year will be composed of devices with screens 8-in. or smaller.
"[That's] a remarkable leap from just 33% in 2012," IDC noted. "Of course, the launch of Apple's iPad Mini will drive much of this demand, but expect intensifying competition from Amazon's refreshed Kindle line-up, the surging Google Nexus 7, and Barnes & Noble's refreshed Nook offerings."
Singh agreed. "I expect lower price points to drive adoption going forward, and that gives smaller tablets the advantage," he said Tuesday. "I think the iPad Mini has the potential to be the most popular iPad model, once Apple manages to fix their supply issues."
Gregg Keizer covers Microsoft, security issues, Apple, Web browsers and general technology breaking news for Computerworld. Follow Gregg on Twitter at @gkeizer, on Google+ or subscribe to Gregg's RSS feed. His email address is gkeizer@computerworld.com.
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