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Optoelectronics/Displays  

iPad mini shipments suffer from low display supply

Posted: 28 Oct 2013     Print Version  Bookmark and Share

Keywords:IHS  iPad mini shipment  Apple  Retina display  A7 processor 

According to the latest forecast from IHS, supplies of Apple's second-generation iPad mini are expected to fall short of demand in 4Q13 due to limited production of the tablet's new Retina display. Shipments of the new iPad mini with Retina Display will fall below 40 lakh units and potentially amount to less than 30 lakh units in Q4. This would represent as little as one-third of the 89 lakh unit volume of the first-generation iPad mini shipments during 4Q12, the first quarter when that product was sold, noted the market research firm.

Actual demand for the original mini was well above the 89 lakh figure, leaving Apple with a huge backlog of orders for the mini at the start of 2013. With demand for the new mini in Q4 expected to equal or exceed the nearly 90 lakh units of its predecessor model, supply and demand will be severely out of balance.

"Apple is being rather vague about the exact availability date of the new iPad mini with Retina Display, simply stating that the product would ship later in November," noted Rhoda Alexander, director of tablet research at IHS. "The company has good reason to be coy about the exact release date, given that supply of the new mini is going to be ridiculously tight in Q4. The heart of the problem is supply constraints on the new Retina panel."

Production is still ramping up on the 7.9in Retina panel with low yield rates limiting production, according to IHS display research. With most of the production occurring late in the quarter and the challenges inherent in the new system design, iPad manufacturing is expected to lag well behind panel production in Q4.

Supply will improve substantially in 1Q14, but with Chinese New Year falling at the end of January, supply difficulties on the new mini could linger into February or March of 2014.

"With supply of the new Retina mini estimated to come in at one-third or less of Apple's mini unit shipments in 4Q12, it's curious that Apple elected to include the product at the same time as the iPad Air," Alexander said. "The iPad Air is an impressive product in its own right. Faster, lighter and substantially thinner than earlier generations, the iPad Air provides a long-awaited design refresh of the 9.7in iPad. Apple could have split the product launches, as they did in 2012, and introduced the mini in 1Q14."

The iPad Air incorporates the design elegance of the original mini, delivering a device that is 0.4 pound lighter and 20 per cent thinner than its predecessor. Apple also improved connectivity, incorporating MIMO inside to boost WiFi performance, A7 processor chip and expanded LTE bands to support more carriers around the globe.

The single 4Q13 launch, in contrast to the two-pronged launch strategy of 2012, has created some serious growth challenges for Apple in 2013.

Lacking an iPad launch in March, Apple's tablet unit shipments declined in 2Q13 compared to one year earlier—the first time the company suffered such a decrease for its tablet products. That timing shift also robbed Apple of the momentum that it normally had in what is historically a slow consumer quarter and opened the door to competitors such as Samsung, which launched its 8in Galaxy Note during Q2.

A launch now of the iPad Air—perhaps coupled with the a separate launch of the iPad mini with Retina Display in February or March of 2014, when supply will be more assured—might have set the stage for a return to the two-pronged launch strategy that served Apple so well in 2012.

In addition to potentially providing an extra boost to iPad shipments in 2014, the two-pronged approach could have also allowed Apple to own the product news cycle for much of the year, which provides copious free advertising for the Apple brand.

The 2,048x1,536 resolution display on the iPad mini with Retina display—in the same pixel format as that of the iPad Air—costs substantially more than the 1,024 x 768 version in the original mini.

The iPad mini with Retina Display costs Rs.25,094.34 ($399) for the 16GB model.

By itself, this high resolution is insufficient to justify a selling price for the new mini that is Rs.4,402.52

($170) more the than that of the new Google Nexus 7 tablet and the Kindle Fire HDX 7 from Amazon, each priced at Rs.14,402.52 ($229) for similar pixel density. It is the combination of the Retina Display panel with the new iPad mini's overall product design—including 64bit architecture, durability, ease of operating system upgrades and richness of the Apple ecosystem—that makes the math work. That said, the price point is likely to be a sticking point for value-centric consumers weighing the lure of Apple against the ever-expanding array of Android alternatives.

Apple has dropped the price point of the original mini to Rs.18,805.03 ($299) to reach some of those users, but that price point still sits well above the market average for 7in products with similar performance.

For more statistics and forecasts, click here.





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