Is the Age of the "Big" iPad Over?

Jefferies has come out today to note that Apple (NASDAQ: AAPL  ) has cut its components orders again, something which famously injured the stock several weeks ago due to fears of declining iPhone demand. In this video, however, Motley Fool senior technology analyst Eric Bleeker tells investors that while sales of the larger iPad are slowing sharply, sales of its little brother, the iPad Mini, are on the rise. Eric speculates that while the Mini is a lower-margin device than the standard iPad, focusing more on the Mini for Apple was in keeping with its philosophy of aiming for customer satisfaction even if revenue takes a hit. Eric believes that while a transition from a focus on the iPad to the iPad Mini might compound margin contraction in the short term, in the long term it was the right thing to stay in line with consumer demand.

There's a debate raging as to whether Apple remains a buy. The Motley Fool's senior technology analyst and managing bureau chief, Eric Bleeker, is prepared to fill you in on both reasons to buy and reasons to sell Apple, and what opportunities are left for the company (and your portfolio) going forward. To get instant access to his latest thinking on Apple, simply click here now.


Read/Post Comments (6) | Recommend This Article (8)

Comments from our Foolish Readers

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  • Report this Comment On February 14, 2013, at 1:26 AM, SGCInvestor wrote:

    "Jefferies has come out today to note that Apple (NASDAQ: AAPL ) has cut its components orders again"

    Again?

  • Report this Comment On February 14, 2013, at 2:28 AM, bbrriilliiaanntt wrote:

    Margins and profit per unit are distinct entities. The margins on the iPad mini are about 10-15% greater than the big iPad retina, and should only improve with operational improvements, yield increases, and economies of scale.

  • Report this Comment On February 14, 2013, at 2:30 AM, SteveJobs5 wrote:

    WHY HASNT APPLE THOUGHT OF MAKING A ***BIGGER*** iPAD??? Duh, it would be nice for presentations and still mobile as one piece in a sleeve carry pouch. How about a 13 or 15 incher???

  • Report this Comment On February 14, 2013, at 2:47 AM, applefan1 wrote:

    A 13 or 15 inch iPad would weight too much due to a much bigger battery and the CPU/GPU would be have to be more powerful. I would love a bigger iPad because it would have a full sized keypad, plus we would have more real estate.

  • Report this Comment On February 14, 2013, at 3:40 AM, aeosfool wrote:

    How come there is always so much mis-information on Apple and its products? The ipad mini has higher margins than the full size ipad according to the services that take apart products and calculate their cost.

  • Report this Comment On February 14, 2013, at 9:16 AM, TMFRhino wrote:

    "How come there is always so much mis-information on Apple and its products? The ipad mini has higher margins than the full size ipad according to the services that take apart products and calculate their cost."

    You mean those same researchers that said the iPhone 5 bill of materials was similar to the 4S? That didn't bear out when Apple reported actual earnings and we found a pretty steep gross margin decline. The researchers whiffed badly somewhere - probably the cost of in-cell touchscreen advancements.

    "Margins and profit per unit are distinct entities. The margins on the iPad mini are about 10-15% greater than the big iPad retina, and should only improve with operational improvements, yield increases, and economies of scale."

    Again, we need to be cognizant that these researchers are often incorrect. Tim Cook has said they've sacrificed margins on the iPad mini.

    However, entirely correct this could change over time. I noted in the video "big" iPad vs. iPad mini concerns are likely more short-term in nature.

    Thanks all.

    -Eric

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