iPad mini cannibalizing sales of iPad, says analyst

Apple's new 7-inch tablet may be nicknamed Mini the Cannibal as it eats up sales from its bigger brother.

A poll of 50 Apple stores conducted by Citi this week found limited stock of the iPad mini, but wide availability of the fourth generation iPad.

Among the stores called, 80 percent indicated that some version of the Mini was on the shelves. But 96 percent said that overall availability was limited based on the amount, storage options, and colors that consumers were seeking. Among the various models, the 32GB iPad mini showed the greatest availability.

In contrast, 100 percent of the stores said the iPad was available, while only 6 percent said its availability was limited.

"While not explicitly asked, it is clear in our survey work that [the] iPad 4 is not selling well, cannibalized by Mini sales," Citi analyst Glen Yeung said in an investors note released yesterday.

Around 10 million iPad minis were manufactured for the current quarter, the analyst estimated, compared with 10 million to 15 million for all other iPads combined.

The iPad mini has also been in short supply reportedly due to manufacturing snafus. In his note, Yeung cited a November 27 story from the Economic Daily, which claimed that Apple asked its iPad panel supplier AU Optronics to stop shipments due to high defect rates.

Sources also told DigiTimes that AU Optronics has run into production issues, causing its percentage of panel shipments to drop. Apple relies on LG Display as its second supplier to make the iPad's panels.

AU Optronics has refuted the claim, telling Bloomberg that its iPad panel shipments remain normal.

Either way, the panel for Apple's 7-inch iPad mini is 24 percent thinner than the one for its larger counterparts, while the TFT (thin film transistor) and color filters are 25 percent thinner, the analyst noted. Its bezel is narrower as well. Combined, such factors do create complications for manufacturers, Yeung said.

However, Citi analysts believe those issues will be resolved by the end of the year.

"With the help of our Asia team, we also conclude that iPad Mini shipments are likely to increase (quarter to quarter) as panel and assembly yield issues subside," Yeung said.

This article originally appeared on CNET.