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iPad sales skew even more toward Mini

But analyst argues that the average selling price will climb for Q4 2013 when Apple announces earnings next week

By Gregg Keizer, Computerworld
January 21, 2014 03:51 PM ET

Computerworld - iPad sales shifted over the last year, with fewer buyers purchasing the aged iPad 2 and more choosing the lower-priced iPad Mini, a research firm said today, citing a survey of 500 Apple customers.

"People moved up to the [iPad] Mini, especially the Mini with the Retina screen," said Michael Levin, co-founder of Chicago-based Consumer Intelligence Research Partners (CIRP), when asked about the decline in sales of 2011's iPad 2.

"The iPad Mini was not just a small iPad but also a cheap iPad," Levin continued, referring to the $329 price of the original and the $399 of the Retina edition. The iPad 2 also costs $399. "It was a means for people to get an iPad, both more portable and more affordable."

According to CIRP's survey of those who purchased an Apple product in the final quarter of 2013, just 5% said they had bought an iPad 2, down dramatically from 27% in 2012's fourth quarter.

Other models also dropped in popularity after Apple started selling the iPad Air on Nov. 1, and the high-resolution, Retina-equipped iPad Mini on Nov. 12.

In 2013, the Retina iPad accounted for 13% of the Apple tablets purchased by those CIRP polled, down from 2012's 43% as those buyers switched to the new and lighter -- and same-priced -- iPad Air, which in the two months remaining to it for the quarter snapped up a 41% share.

The original iPad Mini fell from a 30% share in 2012 to 25% in 2013, but the Mini total jumped from 30% to 41% on the back of the six-week sales stretch of the Retina iPad Mini, which accounted for 16% of all Apple tablets, said Levin.

"Unbelievable," Levin said about the quick sales increases for the Air and Retina Mini in just weeks. Together, the two new models accounted for 57% of all Apple tablets purchased in the fourth quarter.

The decline of the less-expensive iPad 2, the rise of the pricier iPad Mini with Retina and a small trend toward SKUs with more memory -- which cost more -- across the board should translate into a higher ASP (average selling price) for the iPad line as a whole.

"We'll see a healthy boost to the ASP [next week]," Levin predicted, talking about the Jan. 27 earnings call Apple will host for Wall Street analysts. Levin forecast a 5% to 10% in the ASP for the fourth quarter.

In the last quarter for which Apple has reported sales figures -- the one that ended Sept. 30 -- the iPad's ASP was $440, down 13.5% from the same quarter the year prior.

Using CIRP's iPad purchasing poll numbers and adjusting for higher-storage sales as reflected in 2012's fourth quarter, Computerworld pegged the iPad ASP increase at 8% for the final quarter of 2013.

The ASP is important to Wall Street, although not to customers; the latter uses the number to gauge Apple's margins, and thus profitability. The ASP has been in decline for nine straight quarters, which has concerned investors.

The ASP would turn upwards if Apple sold more larger-size iPads rather than the 7.9-in. Mini. And that may be in the cards, according to researcher IDC.

Previously, IDC predicted that 8-in. and smaller tablets would peak this year at about 57% of the market, then slide back slightly the following years as more buyers opt for larger-screen smartphones.

Originally published on www.computerworld.com. Click here to read the original story.

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