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Morgan Stanley: iPad mini cannibalization "overblown"
A survey of over 1,000 U.S. consumers was published today by Morgan Stanley and AlphaWise, showing that although sales of the iPad mini are cannibalizing sales of some of the full-size iPads, concerns over the trend are "overblown." That was the opinion of Morgan Stanley analyst Katy Huberty, who said that the numbers show that Apple's risk over cannibalization by the mini is "manageable." The numbers she's referring to indicate that 47 percent of iPad mini purchasers are new to Apple, which is slightly less than the 56 percent number for the full-size iPad. There were other positive signs for Apple; the survey showed that about the same percentage of potential buyers -- 50 percent -- plan on purchasing an iPad over other tablets as they did in December 2011. The news isn't as rosy for Amazon's Kindle Fire, which saw a 5 percent drop in respondents planning a purchase. Microsoft's new Surface tablet is apparently interesting to 12 percent of the respondents, while Samsung's tablets showed a 7 percent rise in purchase intentions over December 2011. Google's Nexus tablet also showed a solid rise of 6 percent, while all other tablets saw a huge drop in interest from 24 percent last year to only 5 percent in 2012.
Analyst: Apple's sales in China could triple in two years
Here's more good news for Apple from the Chinese front: Katy Huberty and Mathew Schneider from Morgan Stanley have released a report saying that Apple could make as much as $9 billion from China in the fiscal year of 2012, as opposed to $2.9 billion in the last fiscal year. That kind of growth would be better than the rest of the world, which means that if there are any problems with Apple's revenue in the US and Europe over the next few years, China will likely make up for them. The report says all of that growth will come from two major factors. First, Apple is expected to expand its sales network in China. Apple has already founded four major retail stores and begun device sales through China Unicom and its online store, but there will have to be more ways for Chinese customers to find and buy Apple products in the future. Secondly, as we've heard before, China is about to go through a major surge in the middle class, bringing more people than ever into the range of buying and using Apple's products. If Apple can take advantage of that upcoming rise in income over much of the country, it'll be well on the way to the $9 billion number. This isn't a huge surprise -- we've known for a while that China will be a big source of growth for a lot of consumer electronics companies in the next few years. But it's interesting to see some numbers out there about just how big Apple's business in China might get.
Analyst: Apple producing more iPads
Analyst Katy Huberty from Morgan Stanley tells All Things D that she believes Apple is ramping up production on the iPad, aiming to build as many as three million a month by the end of this year. That would mean that the company could make 36 million iPads next year, which brings the total close to (but not quite) the whopping 40 million units predicted by her supply chain analysis. Sales estimates for next year started out around 10 million iPads, but have since risen to as high as 42 million units, which would be quite a year for a product that didn't exist before this past April. Currently, says Huberty, Apple is producing about two million iPads a month, and that's brought shipping times on the website down, and helped availability across the board. But the manufacturing process needs to be refined even further, and of course if, as expected earlier next year, the device sees a revision, that may delay things even further. There seems to be one thing most analysts agree on, however: Apple is going to sell a whole lot of iPads in 2011.
iPad suppliers forecast shipments of 8 - 10 million for calendar year 2010
Analyst Katy Huberty at Morgan Stanley has published a research note forecasting shipments of 8 - 10 million iPads during calendar year 2010. That's significantly more than previous estimates, which showed shipments of about 5 million devices. The note, as reported in a WSJ All Things Digital post, still maintains a sales estimate of greater than 6 million iPads for the year, since shipments are not necessarily equal to sales (some production remains in distribution channels at year-end). Huberty notes that investors who are bearish on the iPad say that it lacks a "killer app." She counters with speculation that the near-term target is for the sub-$800 notebook computer market, which currently appears to be in the range of 30 million units in the United States and 120 million units globally. In the long run, media (video, magazines, books) and apps that have been optimized for the iPad will significantly increase the market size. For the short term (through May, 2010), suppliers are expecting to ship 2.5 million iPads. This is up sharply from Huberty's initial estimate of 750,000 units through the end of June. Earlier this month, analysts were reporting that delays in early iPad production would limit the quantities available at launch. Huberty has not been particularly bullish on Apple in the past several years, but has recently been citing Apple's leadership in the mobile device space and talking about "bull case scenarios" for Apple's future.
Analyst: There's a market of four to five million iPhones a year in China
I thought Apple sounded a tad bit defensive about China on the conference call Monday, but Morgan Stanley analyst Katy Huberty says there's nothing to worry about: she expects Apple to sell up to four or five million iPhones in China per year. Apple told us on Monday that they've activated about 200,000 iPhones in China so far, but Huberty claims that there's a market for maybe 50 million iPhones over there, and echoes Tim Cook's assertion that price is the main issue. "Hardware pricing, service plan pricing and the large up-front payment," she says in her report, "were cited by 85%, 66% and 56% of respondents respectively, as reasons they were not likely to purchase an iPhone." Keep in mind that the four to five million figure is a top end -- in the first year, Apple has said that they're aiming for more like one or two million. But there is definitely a solid market to be found in China, and significant sales there could help buoy Apple earnings reports over here for sure.
