Apple announces 3 million iPad’s sold this weekend

Murasama
Linky…

As expected/customary, Apple didn’t break out the exact number of mini’s or 4th generation iPad’s that were sold.  But one can extrapolate based on the bumped up shipping estimates, which product was in higher demand; and that is a larger percentage of that 3 million were likely mini’s as opposed to the 4th generation iPad.  Mind you, this is only for the WiFi iPad’s as Apple does not book sales until the product actually ships (the WiFi + cellular models do not ship for another few weeks).  And even if just 50% of that 3 million were mini’s, that number is still the high end of what many were expecting Apple to be able to sell during the first weekend.  Furthermore, this is also with the mini being a highly constrained product which is acting as a throttle on Apple being able to meet the demand.

Why is this exactly important?  Because from my perspective, the iPad mini is to the iPad as the iPod mini was to the iPod.  It was the smaller/cheaper form factor iPod’s (including the Shuffle) which played a role in bringing more people into the Apple ecosystem (and brought in a larger captive customer base which has been able to be tapped for higher margin purposes over the course of time).  As mentioned in my own short overview of the mini, I’m finding it a more than capable replacement over both the 1st and 2nd generation iPad’s.  Compared with the 3rd and 4th generation models, there is now a greater delineation (processor and Retina Display) where I believe that eventually, the 2nd generation model will go the way of the white polycarbonate MacBook (which Apple continued selling for awhile along side the unibody aluminum Pro’s).

Like many investors, one of my biggest concerns was the pricing of the product (when taken into the context of the increased competition in the 7″ space where the average pricing is around $199).  Myself, I was less concerned with the potential margin compression which itself, was a bit overblown for the mini as teardowns and bill of material costs revealed that Apple could have around a 43% gross margin on the product (Apple’s quarterly guidance on lowered margins is likely due to the early product transition of the 3rd to 4th generation iPad where remaining inventory of the 3rd generation product are being sold at lowered price points).

In light of the increased competition in this space, this initial sales number reveals that the demand for Apple’s mobile products remains strong even though the economic climate is still suspect.  It’s also why this minor bump in the stock presented yet another great buying opportunity.  Once the supply constraints on key components like the display ease, they will be able to sell mini’s as fast as they can make them.  Whether or not this will allow Apple to maintain it’s dominance in terms of tablet-optimized apps (important as far as the product being able to be adopted into a wide variety of uses) remains to be seen.

tl;dr version: the juggernaut continues.

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