iPad mini doesn’t cannibalize demand, it creates it

Way back before the iPad mini was announced, analysts and market observers slaved away, crunched some numbers, and came to the conclusion that the – then speculated – device would cannibalize the demand for its bigger brother. Some estimates of this cannibalization rate were as high as 50%, whereas the more common and feasible predictions were in the 10-20% bracket.

As it turns out, the people who were ‘in the know’ (tech bores) were wrong.  In-fact, the iPad mini steals almost no sales whatsoever from its 9.7-inch brother, meaning that the device is, in effect, creating its own demand.

How was this discovered? Surveys. Loads of them. Precisely, 1,225 American adults were questioned. 12% of those surveyed said that they planned to buy Apple’s tiny iPad, and of that 12%, over half said that they hadn’t owned a tablet before.

However, a somewhat more interesting fact was discovered when those involved in the survey were asked if they would buy an iPad mini to replace another device. Just 16.6% of possible iPad mini consumers answered ‘yes’. When asked what device the iPad mini would replace, 42% said a ‘Windows PC’, 29% said an ‘iPad’ and 13% said a ‘Kindle Fire’.

So there you have it, only a tiny portion of iPad mini buyers are planning to buy the device to replace an iPad, or, as Cowen analyst Matthew Hoffman puts it, “The iPad mini creates more demand than it cannibalizes”.

Obviously, the iPad mini will take the odd sale from the ‘regular’ iPad, but for the most part, it’s attracting new customers to Apple’s iPad range.

If you’re struggling to grasp this, then you’re in luck, because Cowen has made these two handy bar charts. One is for the question “Will  iPad mini replace another device?”, and the other, “What device will the iPad mini replace?”. Check ’em out below.


Via: All Things D


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