Will the iPad mini Cannibalize Existing iPad Sales?

Source:TechCrunch

With the launch of Apple’s iPad mini Friday, tech analysts can’t help but wonder how this new product line extension will cannibalize existing iPad sales.  Although it’s difficult to really know the true effects, Apple did break out its iPad 2 sales as a result of a recent court order (an exception to Apple’s typical reporting), so there is much speculation.  “The iPad mini seems downright hungry, and it has a taste not just for other small tablets on the market, but for its larger brethren, the iPad with Retina Display. Or at least, that’s what some analysts are saying, with expectations of the iPad mini’s cannibalization effect on existing iPad sales ranging from around 10 to 20 percent on average. But one suggests that it could be more like 50 percent, based on numbers Apple revealed at a recent court proceeding between itself and Samsung.”  Data from a recent trial showed the iPad 2 as the most popular iPad sold during summer 2012, and that it ate into ~58-61% of overall iPad sales.  “The reason and primary positive difference between the two?  A $100 price drop compared to the 3rd generation iPad that went on sale the same time it got its retail value reduced.  Applying the logic that a $100 price cut caused that much cannibalization, it stands to reason that another $70 dip on top of that would have a compound effect and attract even more buyers away from Apple’s product.”  

Because of Apple’s halo effect across product lines, Apple has generated a loyal customer base, many of whom run out to buy the latest and greatest Apple launch.  Given the upcoming holiday season and the lower price point of the iPad mini, it will be interesting to see how the iPad mini sales fare.  I also wonder, given Apple’s existing iPad, iPad 2 and iPhone, at which point consumers just get annoyed or frustrated because the products are so similar, or at which point they realize that the Apple products they already have are sufficient as they have such similar, if not identical functionalities?  While it may be a “status symbol” or just “cool” to have the latest Apple product, how many Apple products can one have or use at one time given the synergies between the products?  For me, my iPod became less relevant when I got my iPhone, and my iPhone and iPad have similar functionalities, but because I use my iPhone for texts, calls and emails on the go (and it’s more convenient to carry), I seem to use my iPad less often.  I wonder if other Apple consumers are having, or will have, similar experiences.