Apple's rumored November launch of a smaller, less-expensive iPad will put the company in a tight spot -- tighter than usual -- if it's not able to build up and maintain adequate supplies through the holiday season, analysts said today.
Earlier this week, speculation resurfaced about an "iPad Mini," the tag given to a 7.85-in. tablet, when Fortune cited a source who claimed Apple would invite reporters, bloggers and analysts next week to an upcoming event.
That rumor was bolstered today by the Wall Street Journal today ( paid subscription required), which reported that Apple's Asian suppliers had begun production last month.
Based on past practice, Apple would likely unveil an iPad Mini on Oct. 17 and start selling the tablet -- perhaps at prices as low as $250 -- on Nov. 2.
That date, if true, would be Apple's latest-ever in a calendar year for a new product launch. The company typically ends its introductions in October, and even then, has limited them to relatively minor refreshes of existing products.
On both Oct. 20, 2010, and Oct. 20, 2009 -- the current latest-ever record for a product debut -- Apple started selling revamped MacBook Air notebooks and iMac desktops, respectively. On Oct. 14, 2008, Apple revealed significant changes in its MacBook and MacBook Pro lines by introducing the first "unibody" designs for its laptop line. And last year's iPhone 4S started selling Oct. 14.
"The biggest question [for an iPad Mini introduction in November] would be how much out-of-stock problems there will be," said Steven Baker, a retail analyst with the NPD Group. "Assuming there's huge demand, which I think there will be, will they have enough stock to make it through Dec. 25? If they have just four days of inventory at launch, for example, retailers are not going to like that."
The retailers Baker was talking about would presumably include those that now sell the larger iPad, like Best Buy, Target and Wal-Mart.
Customers would also be upset if stocks aren't sufficient, and long shipping delays are slapped into place almost immediately. The problem: The short stretch between early November and the heart of holiday sales, which in the U.S. start on Black Friday, Nov. 23, and run through Christmas, Dec. 25.
The iPhone 5, for instance, which launched Sept. 21, was quickly backordered to three to four weeks, where it remains.
Those kinds of delays could spell problems for an iPad Mini launched so late in the year. Customers, hoping to buy one or more for themselves and as gifts, could read the shipping delays -- especially as Christmas draws near -- realize they have little chance of receiving a Mini before the holiday, and switch their purchase to one of the many 7-in. tablet alternatives, which this year includes Google's Nexus 7 and a revamped Kindle Fire from Amazon.
"The problem is adequate inventory, it always is with Apple," said Ezra Gottheil, an analyst with Technology Business Research. "If they can't meet what will probably be a very large demand, that's an issue. Frankly, they're not the only company with problems like these. Last year the Kindle Fire had the same problem."
Amazon's original Kindle Fire launched last year on Nov. 14, even later in the calendar than the iPad Mini's presumed Nov. 2 date. An estimated 5 million Kindle Fires were sold in the fourth quarter of 2011, but sales dropped off precipitously after the holidays, showing the need to strike when the holiday iron is hot.
"It's always better [to launch] sooner than later, because if there is a delay, you have time to recover," said Baker. "That's really a problem only for high-profile stuff, and more of an issue with people in the stores shelving and merchandising. The second [issue] is advertising. You want to make sure there's time to set that up. The later [a launch is] the less wiggle room there is."
Apple is unlike other computer and device makers, Baker admitted, because it has its own chain of retail stores, several hundred at this point in the U.S., Canada, China, Japan and several European countries.
At its own stores, of course, Apple has complete control of the process, and a late start to an iPad Mini wouldn't pose problems. But it still sells a good amount of tablets through its retail partners, who could be affected by a November launch.
"[Apple] gets a little more flexibility from retailers with iPads and iPhones because they have such a big share of those markets, and they drive traffic," acknowledged Baker, noting that it would be unlikely for a retailer to put up a fuss about an early November timetable.
And Apple's a special case for another reason, Baker argued: It limits the versions, or SKUs (stock-keeping units) to a minimum, unlike other OEMs, such as those expected to debut Windows 8- and Windows RT-powered tablet this year. Collectively, those hardware makers could present retailers scores of tablet SKUs. "Then the retailer has to reset a whole section," said Baker.
Apple has options, of course. It could alleviate potential shortages by limiting the 2012 roll-out to a few markets, say, the U.S. and Canada. However, that would be going against the grain: In the last two major launches -- the new iPad in March and last month's iPhone 5 -- Apple either implemented or plans to implement an accelerated roll-out to more countries, and to them faster.
In the end, there's a lot on the line, analysts say.
"[A 'Mini'] will be pretty big..., huge," said Brian White, a financial analyst with Topeka Capital Markets, in a Monday interview. "Eventually, it will be bigger than the [traditional] iPad market."
Gregg Keizer covers Microsoft, security issues, Apple, Web browsers and general technology breaking news for Computerworld. Follow Gregg on Twitter at @gkeizer, or subscribe to Gregg's RSS feed . His e-mail address is email@example.com.
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