November 19, 2013, 3:55 PM — The Retina iPad Mini's "secretive" launch was driven by severe shortages, which have not improved since Apple started selling the smaller tablet a week ago, a financial analyst said today.
The surprisingly quiet launch of the new 7.9-in. iPad Mini -- Apple simply stuck the tablet on its online store, and hours later deigned only to announce availability via a press release -- was the company's attempt to deal with short supplies, said Brian White of Cantor Fitzgerald.
"Apple has historically announced pre-order periods well in advance," noted White in a note to clients last week. "We believe limited availability may have driven the company into a more secretive launch this time around."
In another note today, White reiterated that, and said the supply situation was still "very constrained."
White said that a survey of about 50% of U.S.-based Apple stores showed that only 27% of the eight different Wi-Fi-only iPad Minis -- four each in "Silver" and "Space Gray," at storage capacities of 16GB, 32GB, 64GB and 128GB -- were available for pick-up after ordering online.
Some models were even harder to find than that.
Using an online product tracker, Computerworld found that just 9% of all U.S. stores had the Space Gray 16GB Wi-Fi-only iPad Mini in stock early Tuesday, and just 7% had the Silver 16GB Wi-Fi-only model. An hour later, the Space Gray tablet's availability had dropped to 8%.
White said Cantor's survey pegged the Silver 32GB iPad Mini as the most available, with 76% of the stores showing stock for pick-up. (Computerworld's tally came in virtually the same, at 77%.)
With such short supplies, White wondered whether Apple's stores would have iPad Mini stock for Black Friday, which this year is Nov. 29, the day after the Thanksgiving holiday in the U.S.
"We had hoped the iPad mini with Retina would launch later this week (11/22) in volume at Apple retail stores (and possibly it will), but at the very least, we believe Apple must make the new device available for Black Friday," he wrote.
"I would be surprised if they don't," White said in an interview Tuesday. "It would be shocking, actually. You have to have something [in the stores that day]."
Still, he found the iPad Mini supply situation, and how Apple handled it, curious. "Most people didn't realize Personal Pickup was available," he said, referring to Apple's term for ordering online, then designating a local store where the goods can be claimed. "Apple didn't do pre-order, which they usually do, they didn't put out a [press] release until hours after sales started, and although it mentioned Personal Pickup, it really wasn't available that day."
White speculated that with limited supply -- reportedly because of yield issues with the higher-resolution 2048 x 1536 display -- Apple decided to concentrate on the 32GB models, rather than the lowest-priced 16GB configurations.
"With limited displays, you don't want to invest in the lowest price," said White. "The 32GB is popular, and not the low end."
Apple's margins increase significantly as its devices' storage sizes climb, as the Cupertino, Calif. company charges $100 more for, say, the 32GB iPad Mini than it does for the 16GB model, but spends only a few dollars more on the additional flash RAM to build the former.
The Retina iPad Mini starts at $399 for the 16GB tablet, a 21% increase over the first-generation's price, and climbs to $499 for the 32GB, then to $599 and $699 for the 64GB and 128GB, respectively. Tablets able to connect to cellular networks run $130 more for each configuration.
"Most stores have at least one model in stock," said White. "Only 5% had nothing. But we're finding that [overall] the Mini is just not that available."
Today, Apple's online store showed shipping delays of 1 to 3 business days for 16GB and 32GB Wi-Fi-only Retina iPad Minis; the roomier configurations indicated delays of 5 to 10 business days.
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 email@example.com.
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