There are so many reasons to love this photo of Apple marketing boss Phil Schiller holding up an iPad Mini. For one thing, it captures the kind of hushed sanctimony and reverence with which Apple introduces things that are, essentially, little plastic gizmos. But mostly I love Phil’s weird off-camera gaze, which reminds me of this photo from Stepbrothers. What is he looking at? What’s he thinking? Is he fearful, even then, on the day of the introduction, that this cool new device is going to kill sales of the bigger iPads and thus drag down Apple’s profit margins?
(See also Is The iPad MIni The “Real” iPad?)
If so, then Phil was right, because apparently that’s what’s happening, according to a report from Digitimes, which claims Apple is cutting back orders for components used in the big iPad and now expects to sell fewer of them than originally expected. Mostly because it’s selling so many of these goddamn iPad Minis.
Digitimes says Apple originally planned to sell 60 million big iPads and 40 million Minis, but that now Apple expects to sell 33 million big ones and 55 million little guys.
That’s great news if you’re the product manager in charge of the iPad Mini – you’re having a blowout year! But you’ll notice that the new sum total of all iPad sales for the year stands at 88 million, which is less than the previously expected 100 million. This is not good.
My Entire Premise Could Be False, In Which Case, Sorry
Then again this entire report could be bullshit, since it comes from Digitimes, and Digitimes is perhaps not the most reliable publication in the world, as reflected in the headline the story to which I linked, which mentions issues with Apple’s “supplpy” (sic) chains.
But if the report is true, this means Apple will sell fewer overall iPads (of all kinds) than originally expected. And more of what it does sell will be the less-expensive Mini model.
That in turn means Apple is likely to make less profit margin, as the financial wizards at Business Insider point out.
Does Phil Schiller sometimes lie awake at night wishing Apple had never made that damn Mini? Does he lurk outside Apple stores and curse the cheap bastards who keep buying Minis just because they’re $170 cheaper than the big one?
Maybe not. Maybe Phil and his team figure they pulled off a pretty amazing coup. They milked ridiculous margins out of the original iPad for a long, long time. And now that big iPad serves a purpose – it makes the iPad Mini look cheap. Which it’s not, considering that you can get roughly comparable Android tablets for a lot less.
(See also The iPad MIni’s Killer Feature = Price.)
Apple stock is up a bit today to $427, so apparently Wall Street is taking the Digitimes report with a grain of salt.
Photo by Reuters.