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iPad Mini's likely launch date means inventory will be everything, say analysts

Gregg Keizer | Oct. 4, 2012
Apple's rumored November launch of a smaller, less-expensive iPad will put the company in a tight spot -- tighter than usual -- if it's not able to build up and maintain adequate supplies through the holiday season, analysts said today.

"The problem is adequate inventory, it always is with Apple," said Ezra Gottheil, an analyst with Technology Business Research. "If they can't meet what will probably be a very large demand, that's an issue. Frankly, they're not the only company with problems like these. Last year the Kindle Fire had the same problem."

Amazon's original Kindle Fire launched last year on Nov. 14, even later in the calendar than the iPad Mini's presumed Nov. 2 date. An estimated 5 million Kindle Fires were sold in the fourth quarter of 2011, but sales dropped off precipitously after the holidays, showing the need to strike when the holiday iron is hot.

"It's always better [to launch] sooner than later, because if there is a delay, you have time to recover," said Baker. "That's really a problem only for high-profile stuff, and more of an issue with people in the stores shelving and merchandising. The second [issue] is advertising. You want to make sure there's time to set that up. The later [a launch is] the less wiggle room there is."

Apple is unlike other computer and device makers, Baker admitted, because it has its own chain of retail stores, several hundred at this point in the U.S., Canada, China, Japan and several European countries.

At its own stores, of course, Apple has complete control of the process, and a late start to an iPad Mini wouldn't pose problems. But it still sells a good amount of tablets through its retail partners, who could be affected by a November launch.

"[Apple] gets a little more flexibility from retailers with iPads and iPhones because they have such a big share of those markets, and they drive traffic," acknowledged Baker, noting that it would be unlikely for a retailer to put up a fuss about an early November timetable.

And Apple's a special case for another reason, Baker argued: It limits the versions, or SKUs (stock-keeping units) to a minimum, unlike other OEMs, such as those expected to debut Windows 8- and Windows RT-powered tablet this year. Collectively, those hardware makers could present retailers scores of tablet SKUs. "Then the retailer has to reset a whole section," said Baker.

Apple has options, of course. It could alleviate potential shortages by limiting the 2012 roll-out to a few markets, say, the U.S. and Canada. However, that would be going against the grain: In the last two major launches -- the new iPad in March and last month's iPhone 5 -- Apple either implemented or plans to implement an accelerated roll-out to more countries, and to them faster.

In the end, there's a lot on the line, analysts say.

"[A 'Mini'] will be pretty big..., huge," said Brian White, a financial analyst with Topeka Capital Markets, in a Monday interview. "Eventually, it will be bigger than the [traditional] iPad market."


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