The Motley Fool reported that late last month, Apple CEO Tim Cook has stated that he had high hopes for "an iPad Christmas." Everyone agrees that he has good reason for this renewed optimism. For two consecutive months, Apple has released not one, but four critically acclaimed gadgets: iPhone 5C, iPhone 5S iPad Air, and iPad Mini with Retina Display. Apple also dropped the price of the original iPad Mini from US$ 329 to US$ 299.
Despite all of these great things, Apple analysts are surprisingly glum in their prognostications about the iPad. Most analysts expect minimal growth for the iPad this fall, despite the double product refresh. However, the strong response to Apple's new product lineup - especially the full-size iPad Air - could be setting the stage for a blowout holiday quarter.
In the December quarter last year, Apple sold a record 22.9 million iPads, representing nearly 50 percent year-over-year growth. This year, most analysts are predicting single-digit unit growth, with a few even looking for a year-over-year decline.
For example, Steve Milunovich of UBS is one of the more bullish analysts, and expects Apple to sell 25 million iPads this quarter (which he still calls a disappointment). At the other end of the spectrum, Kulbinder Garcha of Credit Suisse expects sales to drop to 21.8 million units. Ming-Chi Kuo of KGI Securities and Michael Walkley of Canaccord Genuity are in the middle, with shipment estimates of 23.1 million and 24.7 million, respectively.
It appears that one of the big reasons for analysts' low expectations is that the iPad Mini with Retina Display is supply constrained. Many analysts have stated that production problems could keep supply to as little as 2 million units for the whole quarter. Others think that Apple might be able to produce (and sell) as many as 4 million.
PCMag.com software analyst Jill Duffy said the shortage seems to trace to Sharp, which makes the Retina display. The supply issue will also help keep up the hype around Apple products, she said.
"The response to iPad Air has been incredible, and we're excited for customers to experience the new iPad mini with Retina display," said Philip Schiller, Apple's senior vice president of worldwide marketing. "We think customers will love both of these thin, light, powerful new iPads, and we're working hard to get as many as we can in the hands of our customers."
In any case, Adam Levine-Weinberg of The Motley Fool believes that Apple can put together a very strong "iPad Christmas," even if sales of the iPad Mini with Retina Display are severely limited by supply constraints. Why? Because the iPad Air seems to be selling very well in its first two weeks on the market. The iPad Air already accounts for nearly 2 percent of all active iPads. That's a much faster adoption rate than what was seen for last year's iPad launches.
The original iPad Mini is also likely to be a big seller this quarter. In recent years, cheaper tablets have been popular with gift-givers. The iPad Mini may have lower specifications than Apple's two new iPads, but for many people it's good enough. At its new $299 price point, the original iPad Mini could be a bigger seller this year than it was last fall (when supply constraints held back sales).
Despite all of these great things, Apple analysts are surprisingly glum in their prognostications about the iPad. Most analysts expect minimal growth for the iPad this fall, despite the double product refresh. However, the strong response to Apple's new product lineup - especially the full-size iPad Air - could be setting the stage for a blowout holiday quarter.
In the December quarter last year, Apple sold a record 22.9 million iPads, representing nearly 50 percent year-over-year growth. This year, most analysts are predicting single-digit unit growth, with a few even looking for a year-over-year decline.
For example, Steve Milunovich of UBS is one of the more bullish analysts, and expects Apple to sell 25 million iPads this quarter (which he still calls a disappointment). At the other end of the spectrum, Kulbinder Garcha of Credit Suisse expects sales to drop to 21.8 million units. Ming-Chi Kuo of KGI Securities and Michael Walkley of Canaccord Genuity are in the middle, with shipment estimates of 23.1 million and 24.7 million, respectively.
It appears that one of the big reasons for analysts' low expectations is that the iPad Mini with Retina Display is supply constrained. Many analysts have stated that production problems could keep supply to as little as 2 million units for the whole quarter. Others think that Apple might be able to produce (and sell) as many as 4 million.
PCMag.com software analyst Jill Duffy said the shortage seems to trace to Sharp, which makes the Retina display. The supply issue will also help keep up the hype around Apple products, she said.
"The response to iPad Air has been incredible, and we're excited for customers to experience the new iPad mini with Retina display," said Philip Schiller, Apple's senior vice president of worldwide marketing. "We think customers will love both of these thin, light, powerful new iPads, and we're working hard to get as many as we can in the hands of our customers."
In any case, Adam Levine-Weinberg of The Motley Fool believes that Apple can put together a very strong "iPad Christmas," even if sales of the iPad Mini with Retina Display are severely limited by supply constraints. Why? Because the iPad Air seems to be selling very well in its first two weeks on the market. The iPad Air already accounts for nearly 2 percent of all active iPads. That's a much faster adoption rate than what was seen for last year's iPad launches.
The original iPad Mini is also likely to be a big seller this quarter. In recent years, cheaper tablets have been popular with gift-givers. The iPad Mini may have lower specifications than Apple's two new iPads, but for many people it's good enough. At its new $299 price point, the original iPad Mini could be a bigger seller this year than it was last fall (when supply constraints held back sales).
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