That's a Lot of iPad Minis

An iPad Mini is coming. This is effectively in the bag at this point. Media invites for the event might even go out as soon as this Wednesday, which implies the unveiling taking place a week later. What remains up in the air are critical details such as pricing or how many Apple (Nasdaq: AAPL  ) could sell this holiday quarter.

Well, The Wall Street Journal is offering up a target on the second part of that puzzle, saying that Apple has ordered up 10 million units from its suppliers. That's about twice as many as Kindle Fire HD units that Amazon.com  (Nasdaq: AMZN  )  has ordered, according to these same sources. That's a pretty bold bet on iPad Mini demand, especially for a product that hasn't even been officially announced to the public. But then again, CEO Tim Cook has been known to make bold bets before.

In order to really let the magnitude of that 10 million figure sink in, this is how iPad unit sales have actually panned out since the tablet's launch relative to that target.

Source: SEC filings.

It took six quarters for the 9.7-inch iPad to break 10 million in quarterly unit sales, and now Apple may be betting the iPad Mini can break that threshold from the get-go. Bold, indeed.

I'm operating on the assumption that Apple will price the device at $299, since $249 now makes no sense in light of the $299 iPod touch that was just released. It would be rather odd to offer a 7.85-inch iPad Mini for less than a 4-inch iPod touch. With that in mind, Apple will probably play the same onboard storage card as always, offering storage upgrades at a premium.

If the company offers an entry-level 16 GB model at $299 and a 32 GB model at $399 and sells 10 million units, that implies between $3 billion and $4 billion in incremental revenue in the fourth quarter. With broader tablet adoption accelerating, Apple has a good shot at hitting that lofty target.

The introduction of the iPad Mini is an event Apple investors have been looking forward to for months. The stakes are high and the opportunity is huge. By picking up a copy of our premium research report on Apple, you'll receive a bonus report all about the iPad opportunity when it's released later this week, and receive ongoing guidance as key news hits. Claim your copy today by clicking here now.

 

Evan Niu, CFA, owns shares of Apple. The Motley Fool owns shares of Apple and Amazon.com. Motley Fool newsletter services recommend Amazon.com and Apple. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.


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  • Report this Comment On October 09, 2012, at 6:47 AM, H3D wrote:

    "I'm operating on the assumption that Apple will price the device at $299, since $249 now makes no sense in light of the $299 iPod touch that was just released"

    How so? A smaller device is more expensive to make.

    Is the iPhone 5, unsubsidised, any cheaper than an iPad 4G unsubsidised?

    The conflict exists only in your misunderstanding.

  • Report this Comment On October 09, 2012, at 7:06 AM, SuntanIronMan wrote:

    " That's about twice as many as Kindle Fire HD units that Amazon.com has ordered, according to these same sources."

    That seems about right. The iPad Mini will definitely be released in more countries than the Kindle Fire HD. The Kindle Fire HD will only be sold in the US, England, France, Germany, Italy and Spain (later this month for those European countries). While the iPad Mini will presumably be sold in all of the countries the 3rd generation iPad is sold in, which is... I'm not exactly sure how many countries that is. A ton of countries, lol. Many more than just the United States and the five upcoming Kindle Fire HD European countries.

  • Report this Comment On October 09, 2012, at 7:15 AM, SuntanIronMan wrote:

    If my count is right, Apple has now released the third generation iPad in a total of 91 countries.

  • Report this Comment On October 12, 2012, at 10:52 AM, TMFNewCow wrote:

    H3D, you misunderestimate me.

    -- Evan

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