iPad Mini Supply Issues Could Limit Launch: NPD

Apple’s iPad mini has officially been introduced, but supply chain constraints could limit the number of devices initially available to consumers.

Apple finally took the wraps off the consumer technology industry's worst-kept secret, the iPad Mini, on Oct. 23, resulting in yet another device that will battle for market share in the increasingly competitive 7-inch tablet market. Sales of the iPad Mini may have more to do with initial supply constrains than any lack of consumer demand, despite a price point for the device, which starts at $329, that struck many critics as too high.

A blog post from NPD DisplaySearch senior analyst Richard Shim, who specializes in notebooks and tablet PCs, said although Apple is expanding its partner base for the iPad Mini, issues with the display panel will limit initial shipments.

"Apple will continue to work with LG Display, which is supplying panels to Foxconn for the finished product, and is adding AUO, which will supply panels to Pegatron. However, AUO is having yield issues with the 7.9-inch panel which is limiting their supply to Pegatron, and in September, AUO shipped just over 100,000 units," Shim's post read. "The production plan is reach 400,000 units in October, 800,000 units in November and 1 million in December. LG Display shipped 300,000 panels in September, and plans to ship 1 million in October, 2.5 million in November, and 3 million in December."

The iPad Mini comes with the aforementioned 7.9-inch display, Apple's dual core A5 processor, up to 10 hours of battery life, and features a design that is 23 percent thinner and 53 percent lighter than the third-generation iPad. The company claims the design has 35 percent more screen real estate than 7-inch tablets and up to 67 percent more usable viewing area when browsing the Web. Its larger brother, the fourth-generation iPad with a high-definition Retina display, comes with a 9.7-inch display and features an A6X processor and up to 10 hours of battery life. At the launch event in San Francisco, Apple said the new iPads could be preordered Oct. 26 and ship Nov. 2.

An Oct. 23 report from IT research firm IHS predicted the arrival of the iPad Mini would turbocharge the 7-inch tablet market, helping it to approximately double in 2012 and 2013, and accounting for 28 percent of all tablets in 2012, up from 24 percent in 2011. IHS noted that the report's projections were conservative figures that could be affected not only by demand for a smaller Apple tablet, but how well Apple would be able to meet demand. High expected demand for the Apple tablets in Asia could also drive sales to extraordinary levels.

Apple's $329 starting price for the iPad Mini puts it in a different price category than other 7-inch tablets like Amazon's Kindle Fire HD, which starts at $169, or Google's Nexus 7 tablet, which runs Google's Android operating system and starts at $199. Apple is likely betting its refined build materials (aluminum and glass versus plastic backing on lower-priced competitors), attention to detail, and extraordinary thinness, lightness, and all-important "cool factor" will make it the must-have device for consumers this holiday shopping season.