Apple Sells Three Million iPads in Three Days | Hacker News Reader

Apple Sells Three Million iPads in Three Days

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66 pointsdrp492971 comments

When Apple's share price took a hit on the announcement of iPad Mini pricing, apparently it was because the analysts though the price was too high. Note - not because Apple's margins were going to be lower on the iPad Mini (which they are), but because they weren't cutting their margins by enough! Given the Apple will sell these things as fast as they can make them, Wall Street was effectively upset that Apple would be making too much money.

This from a company who's whole strategy is about being the upmarket, high margin option. They're so obviously leaving a price umbrella so that next year they can price-drop the current version when the next iPad Mini comes out and still make money hand over fist, while also leaving the opposition nowhere to go price wise.

They release a blockbuster refresh of their main products and gear up to make more money than ever before and their stock price dives 12%. Unbelievable.

No, the fear was that long term the sales of the mini would cannibalize sales of the higher-margin iPad and reduce net margins in a market that is approaching saturation and seeing increasing competition. Obviously that effect isn't going to be apparent in launch-day numbers like this (basically, you'd need to wait to see if the mini owners buy another iPad for that).

But you can believe that "Wall Street was effectively upset that Apple would be making too much money" if it makes you feel better. I'm sure those fund managers stay up late at night worrying about beating their targets...

>approaching saturation

Do you have a source for this? It seems to me that the whole tablet market is cannibalising conventional computer sales, in which case there's a hell of a lot of growth left.

There are clearly lots of people who are done with a working device the moment it gets slight cosmetic damage, or when the newer flavor of the device appears on the market.

It seems strange to me, but it looks like 'personal mobile computers' have a requirement for "device freshness" that is much closer to the shelf life of sliced bread than it is to that of a comparably-priced television.

If this is at all the case, Apple would seem to be headed for $4,000 per share.

> It seems strange to me, but it looks like 'personal mobile computers' have a requirement for "device freshness" that is much closer to the shelf life of sliced bread than it is to that of a comparably-priced television.

That's because the differences are still appreciable to the average consumers. Nobody cared about DVD-Audio, or SACDs, BluRay, 4k HD, 3DTV, etc... because they don't add an appreciable improvement to the experience.

People upgrade their phones or tablets frequently because the new one is almost always very noticeably faster and more responsive than the old one. Considering for many users this is the first time they've been able to outstrip their device in terms of speed (meaning they can navigate faster than the device can respond) I can easily see why upgrades are so desirable.

I think it will cannibalise sales of the higher margin iPad, but that ceding the medium form factor market to 7" Android devices would be a bigger long term risk.

In this sense I agree with the analysis that Apple needed to introduce a lower cost medium form factor tablet for strategic reasons. I just expect them to do so in two phases, in exactly the same way that they have with previous devices. That is, introduce the new device at it's premium price point this year, and then move the year old device down to a lower introductory price point the year after.

In other words I agree with the argument that the introductory iPad Mini should be under $300. I just think that next year is when that should happen and jumping the gun would be a panicky amateur move that Apple would be idiots to make.

Long term iPad margins will be lower than they have been up to now, but that's inevitable one way or another and Apple are doing a great job managing the transition.

I should point out that I completely agree -- this is a market Apple needs to play in, the Android boxes are great too and providing huge price pressures, and Apple's margins absolutely will shrink in the future. And all of that is a good thing for all of us.

Nonetheless from the perspective of an Apple shareholder, it's a "bad" thing, and in the short term you'd expect their stock to reflect that.

It's astounding how poorly the market understands Apple. They're completely oblivious to the real issues that are limiting Apple's growth (constrained supplies of key components), and pay far too much attention to market share.

For most devices in most quarters (aside from those in which a major upgrade to that device is introduced), Apple doesn't tend to have shortages, so it doesn't seem like their growth is being significantly constrained by component supply.

Maybe, but I think it can still be an issue, e.g. they release a new product now, and stock is constrained so they can't sell as much as they like. Now, this is the Christmas quarter, so many people will be buying something. If they can't buy an iPad mini now, and they buy a Nexus 7 instead, it doesn't matter that they could then buy it in January. That's still a lost sale to Apple.

Component shortages can manifest themselves in different ways too, e.g. why doesn't the iPad mini have a retina display? Is it because of display shortages, or processor shortages (non-retina means they don't need to put an A6/A6X in there)? It's arguably not because of profit margin: the Nexus 7 has an almost-retina display at a fraction of the retailing price.

Couple of quick questions: a) Interesting they're not breaking it out between the two given substantially different models and price points? b) The two questions about the Mini are i) does it cannabalize the higher margin "normal" iPad sales and ii) does it slow down Nexus/Fire Android tablets? If it does i) and not ii) then it's arguably a failure. If it does ii) and not i) it's a wild success. Without a break out here between the two models it's really hard to know how to judge these numbers.

I most interested in day 30 - 100 when the initial buzz wears off.

It could still be a huge success while satisfying both of the options you outlined.

It would really just depend on the extent of the cannibalization.

The message they're sending with this press release is "all of our iPads are brand new and popular, so you can't pick the stinky old ~wrong one~ this Christmas".

Furthermore, average selling prices for iPads have already been sinking. Apple's just giving customers another $200 cheaper option to capture that demand. And as long as they can stay the default no-brainer choice in customer's minds, they'll be fine.

Even using current run rate sales of the Nexus tablet, they would only be selling 3M a quarter. Apple sold 3M tablets in a weekend. If only 20% of the reported sales were for the iPad Mini, it is doubtful Apple will be outsold in the holiday quarter (even with giving competitors the extra month), especially considering its distribution reach. However, we'll never know, since neither Google nor Amazon release sales figures (Asus reported the Nexus number).

OTOH, I think everyone agrees that Apple is manufacturing constrained on these things. How long did it take to manufacture those 3M iPad minis? If it takes a month to make what sells in 3 days...

While I agree they are still heavily supply-constrained, the CapEx figures that Apple has released indicates they are significantly ramping up manufacturing capacity. They have sold more than 15M iPads in a quarter before. I would be surprised if they didn't have the capacity to sell 20-25M this holiday quarter.

I would guess the majority of sales were the iPad Mini. I went in yesterday with my gf to buy a retina iPad, and the sales guy assumed we wanted the mini, which they were almost completely out of. When he understood we wanted a full size, that wasn't a problem - he didn't have to check their inventory count.

That doesn't say anything about cannabalization either way, just that I think there's a lot of Minis out there now

A friend of mine has broken this down precisely in this manner, and come up with a 'cannibalisation estimate' [1] of 50%, using product-wise sales data from the Apple-Samsung patent tiff [2].

[1] http://www.tech-thoughts.net/2012/10/ipad-mini-cannibalizati...

[2] http://allthingsd.com/20120809/apple-vs-samsung-trial-forces...

At first I thought it’s a pointless device for me, but after several hours with it I think it’s one of the greatest casual gaming devices on the market. The screen of iPod and iPhone is too small and ‘the new or whatever’ iPad is too large by itself. This holiday season it’s a much better choice as a present for kids than iPod touch.

I got my ipad mini on an impulse buy (actually was after I went to Apple's website to see the apology thing) and looking over the design and spec's and went to my local Tesco's to pick one up. Its a really impressive device, way lighter feeling than my busted Nexus 7 and with a nicer balanced screen. Its really tough feeling as well. Not to mention fast, its just snappier feeling and im getting 12+ hours battery from it as well. Great all round device.

> (actually was after I went to Apple's website to see the apology thing)

This is a fascinating example of "no such thing as bad publicity" :-)

It's interesting how all of a sudden with the option of having a smaller iPad, the "old" iPad has become much to large for a lot of people but when the smaller device was just a rumor a lot of people didn't feel they could fit it in their life. Fascinating how just a few hours with the device are changing people's preferences on the entire tablet market.

Well, recall the reaction to the first iPad itself: many felt there is no need for the big one either.

Very true. Most people don't seem to be able to visualize how a tablet, or possibly any piece of technology, will fit into their lives until they have one and use it. I would guess that showing how these tablets, or any piece of new technology, fits into the prospective users lives should be a goal of advertising campaigns, but that doesn't always seem to be the case especially in the case of the Surface. The commercials I've seen have not demonstrated how a Surface fits into my life at all, unless I dance a lot. But to be fair, a lot of iPad ads don't do it either.

Every year the old version of Apple products become surprisingly worse in the space of a few hours as the new products get released and flaws that the community couldn't previously acknowledge become validated, and even accentuated in light of the new version.

I guess I've been lucky to not get roped into that thinking. I'm still happy using my refurbished first gen iPad and a mid 2009 Macbook Pro. But I will admit that I think I might grab an iPad mini when a retina display gets added in.

Apple moves at a steady and surprisingly predictable pace (at least once they have introduced a new product). They have a small lineup and they often replace products instead of continuing to sell both products. They take good care of making sure that they never have too many or too similar products.

For me those are great virtues. Those are things that make Apple a great company that understands me.

Those are also things that make some people claim that Apple is running some sort of scheme to always get you to buy the newest stuff. I think that’s a bullshitty strawman.

A case in point:

http://www.splatf.com/2012/11/ipad-mini/

7 inch tabets are stupid, 10 inch tablets are perfect, but actually now that Apple's released a 7.9 inch tablet it turns out that that is the perfect size.

(7 inch tablets are still stupid by the way, I don't think the community has settled on a rationalisation for this. They could have gone for 16:9 being the wrong ratio, but it turns out, after the iPhone 5 adopted it, that it was actually very good for video.)

This is what I found as well. At first I regretted my purchase as I was trying to use it to replace my laptop. Then I played one of my favorite iOS games -- Eliss -- in 2x mode. I've never experienced the level of interaction while playing a game as I did at that moment. There is no reason, save for pocketability, that any kid would pass up an iPad mini.

It is amazing how well Apple has done in growing so massively during a world wide economic downturn/depression.

The worldwide downturn/depression hasn't affected people uniformly. The upper class in China/India/Brazil has kept going, and the upper quantile in the developed countries has largely recovered already.

I think a case could be made that the near-constant consumer demand around Apple products is contributing to the increase of consumer debt which, in turn, is one of the largest contributors to the "depression".

I'm not saying they're the only ones to blame here, all consumer electronic companies are doing the same thing, but they're certainly the largest player.

Forced obsolescence around devices that are largely unchanged from one version to the next is not new, but the pace is insane. People are bored days after purchase.

We're sitting on a mountain of tulips. Exploitive, environment damaging tulips.

> I think a case could be made that the near-constant consumer demand around Apple products is contributing to the increase of consumer debt which, in turn, is one of the largest contributors to the "depression".

There's a big difference between consumer debt (often held locally) and national debt (held overseas). I'm not sure consumer debt is as big an issue as you think.

It absolutely is. Increased borrowing to finance consumer spending is largely responsible for the 2007 crash. Sure, the banks made terrible loans and tried to double-down on them, but borrowers are just as responsible.

How many people are using straight-up cash to purchase these devices? They're likely putting them on credit and that credit burden is hardly isolated. In real terms it means that they cannot afford that one extra mortgage/student loan payment, or invest in retirement/savings or kids education.

Arbitrary low interest rates create false security. We are not out of the woods and unless we start to reverse these trends, we're set for another crash.

It it this generations BMW car.

Though I find it interesting you can buy an iPad 2 for seventy dollars more than the mini. For many that is a great option.

For me, having to buy some gifts this year I can get three kids into Nexus 7s for price of two minis.

yeah 3 million in 3 days that is almost as fast as how windows sold (4 million in 4 days) that really is impressive!

You have to compare with respect to existing install base. New product sells in percentage compared to existing user bade is more interesting matrix.

Their products are rapidly replacing household item PC. People used to buy PCs at regular intervals anyway.

And this is only the wifi models of the iPad mini - the 4G ones are coming in a few weeks. Impressive.

Wow! Where does all these customers come from? It seems a lot of consumers buy these products just because they have to have latest Apple gadgets.

No evidence points in that direction. It'd be possible if Apple had only a small amount of loyal customers (like in the nineties), but obviously they do not.

You're saying there's no evidence that the mass market would buy things they might not need just because marketing tells them they should? There are a lot of people who buy the latest clothing fashions or buy a new car every year/two years when the newest model comes out, a lot more than a "small amount of loyal customers".

How many people bought netbooks only to find out they had no real use for one? Now tell me that people wouldn't do the same thing for a product they actually do find genuinely useful. Find where that intersects with the people who have a need for the new features of the latest iPad and you'll find the number of people who are buying the newest version of the hot device simply because they want the newest version.

There was a story on front page how Android tablets are winning market from Apple. I guess that is too a product of marketing?

The inference I get from your comment is that you feel I was arguing that people don't have a need for tablets. This isn't true, I specifically stated otherwise. What I was addressing is the notion that it's not possible for a large part of the market to do year-over-year (or 6 month) upgrades to the iPad they already own.

What do you really need? I still meet people all the time who adore their netbooks (though many did also ditch them as soon as they actually had to use them – I’m seeing that with some tablets, not so often with iPads).

Besides, why do you assume that those people are buying their second iPad? Maybe they are buying an iPad for their kids? Maybe those who didn’t want to get one because of price are now buying one?

I really don’t get that tablets are supposedly not useful. I love my tablet. I use it all the time to read, surf, browse and write e-mails. It does nearly all the things I used to love doing on my PC so much better. It’s just all-around awesome in every respect, worth every single cent. Simply perfect. There has been no other computer I ever owned I liked as much as my tablet. I would not be surprised if quite a few other people also feel that way, maybe to a lesser degree.

I didn't claim that tablets were not needed or that they are not useful. I actually stated otherwise; the intersection between people who need the latest features and the people who are upgrading. I'm also not arguing that these people are not simply buying a new iPad. I'm just trying to argue against the parent's opinion that it's not possible for people to upgrade simply to have the latest tech.

Apple did a global launch, so they come from 34 countries. Plus a ton bought and shipped back to China since China was not part of the initial launch.

Truth. The 黄牛 (yellow cows) will distort iPad sales in the states for a couple more weeks as they seek to satisfy mainland China gray market demand. It will level off around Thanks Giving I hope (I want to buy one myself to take back to China, for personal use!).

This is a big part of it. I talked with a buddy of mine recently who is a big fan of Apple products and owns pretty much every Apple product out there. At some point we started talking about the latest iPad and he said "Man, despite already having iPad 3, I am going to buy this. Not because I need it, but because I have to own it". I know more than a few people who think that way.

I'm not going to pass judgment because I've personally burned a lot of money on expensive gaming machines just because I wanted to play games on the highest settings. Everybody derives pleasure and satisfaction from different things and if burning tons of cash on Apple gadgets makes someone's life better and more enjoyable... more power to them.

Your friend probably represents less than 1% of Apple's total customers. He's not a "big part" of it. That you know him doesn't mean that all of Apple's millions and millions of customers are anything like him.

I think if people like this didn't already own iPads, iPhones etc you could write off their sentiment as due to marketing. But this guy already owns one, He's clearly very well aware of exactly what it can do, how it works and what the benefits are.

But his opinion can't be due to rational, fact based assessment of his practical experience with his iPad. No. It must be irrational and mindless based on marketing. It can't possibly be that he's happy with his iPad because, you know, it's actually good and would appreciate one that's even better. That can't possibly be it.

Welcome to every tech product. I used to read the PC Magazine type publications in the late 1990s. Maximum PC and the like. They'd hype up each new graphics card and CPU so much. I remember feeling bad that I had just bought the 300 MHz PII when the 333 MHz came out.

IMHO, Apple's situation is much better than the CPU/GPU upgrade cycle. They release like once every 1.5 years in each product category instead of like every 3-6 months. And they hype up each release much less than AnandTech/Toms/etc hype up the latest NVIDIA/ATI cards.

Does that number include pre-orders? Because really it would be 10 days since preorders began, not just three.

I would assume it includes the pre-orders, because if it did not then I would guess we would see a headline more like: 3 million iPad Minis in three days PLUS another two million (or whatever) in pre-orders!

Regardless, that's an impressive number for a device that already had well established competition and Steve Jobs claiming nobody wanted it.

EDIT: oh wait, that's 4th gen and iPad Minis combined? I thought it was for just the mini. Are there numbers out there about how the mini sold? I don't see it broken down in the press release unless I totally missed it. I think it's a bit unfair to say that the latest iPad and the mini doubled the number sold of the previous iPad since that's comparing the totals of two products against one. Still, impressive numbers.

If it's anything like the iPhone 5, it'll be the total number delivered into a customer's hands - which will include some pre-orders but not necessarily all of them.

Yes, since they bill at shipment. And it includes iPad 2 sales as well.

Apple just confirmed to the WSJ, that this number doesn't include the iPad 2 (only 4th Gen iPad and iPad mini).

Strange since they said iPads, though I doubt the iPad 2 sales are too high.

i'm guessing preorders count towards the "first day" of sale. However, this is no differrent than every other "Apple sells X of Y on launch weekend" - all of them have had a similar "preorder time". That being said, the numbers seemingly don't include Wifi + cellular models ( as with previous iPads).

It's number sold, so it's not all pre-ordered, only those that shipped prior to today. When you pre-order, you are able to cancel up until it's shipped, and payment is not taken until it's shipped, so these numbers can't be counted.

Given that the white models sold out* within hours (or was it minutes?) and the entry level black model sold out the next day, subsequent orders would not be included in this figure.

* By sold out I mean shipping date slipped

I personally think it's interesting that what would otherwise be a STUNNING sales feat (for just about any other company) is greeted as merely okay or downturnish.

IMO, it would be hard for me to think of any company that would not consider this a successful launch.

Sure there's talk of cannibalizing of larger iPad sales but for me the larger iPad was not that interesting due to having to carry a laptop AND a tablet is painfully heavy (it adds up). I was debating waiting for a Mini with a Retina display but decided early Friday morning to just pick one up.

This is my first ever iOS device and in the days since last Friday, it's been fun to use, is the right form factor for my use cases and frankly, I'm happy with my decision. YMMV.

Now, my next most pressing problem is to find a case for it... Suggestions anyone?

Funny how poorly that page renders on an iPad :-) Wish they would break out 4th gen sales. I agree with many folks that first weekend bookings of a trendy device make for good press and poor investment research. The jan-mar quarter is a better place to try to divine how effective there strategy is wrt to the tablet market.

I think this goes to show that the tablet market that Apple is playing is both different and not as price sensitive as the one Google, Amazon, etc are playing in.

After January 1st, there will (probably) be sub-$300 "good as new" iPad minis available as refurbished devices in the Apple Store too...

there are 4.5 mln android devices sold every 3 days

A dozen versions, sold by dozens of manufacturers. Android is so fragmented it's hard to actually consider it a single thing. It's like saying "4.5 million computers are sold every 3 days".

The iPad is one thing, made by one company, that comes in two sizes.

With different resolutions, different storage capabilities, different memorysizes and computational capacity. Some with mobile broadband, some without.

Which may be used with or without accessories such as a keyboard or stylus.

One thing indeed.

Why would a developer have to account for varying storage, mobile broadband, or Bluetooth accessories like a keyboard or stylus?

As for resolutions or RAM, I think we can all agree 2 is simpler than all.

Legitimate question: Aside from the obvious culprits (Android phones, tablets, Nooks, and Kindle Fires), what other devices are considered "Android" devices?

Apple sales are high due to international availability, and thats no ordinary feat. It would interesting to see US only numbers.

I liked the old Apple, which out-sold the competition just on their product and product differentiation.

Apple's playing in a market that is much more competitive than the PC / MP3 player market though, with competitors working on vastly different business model and undercutting on product whenever they can ...

I for one am glad that Apple is so much more international than Google and Amazon, because I live outside of US.

I've lost faith in humankind. I can die with peace at least.

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