iPad Mini Sales Will not be Impacted by Hurricane Sandy according to Gene Munster

On Friday, Apple launched the Wi-Fi versions of the iPad mini and fourth generation iPad at Apple Retail stores, Apple Authorized Resellers and the Apple Online Store in the U.S. and a plethora of other countries in the broadest first day iPad launch ever.

Brian J. White, CFA, an analyst at Topeka, visited Apple’s flagship Fifth Avenue store in New York City and states that his channel checks indicate that all of the White & Silver iPad mini models are sold.

Additionally, several analysts have reported that likely all of the Black & Slate models are now sold out.

Brian White believes that these early stock outs are driven by the combination of strong demand, combined with a shortage of supply due to the constraints he observed during his recent Asia Technology Tour.

On Thursday,  Gene Munster an analyst at Piper Jaffary predicted weekend sales of 1-1.5 million ipad Minis. He re-iterated his view in a report issued late on Friday.

Based on his observations of lines at Apple Stores in NYC and Minneapolis,  hw continues to believe the company is capable of selling 1-1.5 million iPad Minis in the launch weekend. Munster believes that the company, as it has traditionally, will announce a launch
weekend sales figure on Monday.

However, he notes that the number may include 4th Gen iPad sales as well, which are not included in his 1-1.5 million estimate.  Munster continues to believe that while launch lines and initial weekend sales may not be as impressive as previous iPad launches, the iPad Mini will be a hit product for Apple and become a more significant part of the story over the next 2-3 quarters.

Gene Munster goes into details about the impact of Hurricane Sandy on potential sales of the iPad Mini.  Munster has counted iPad launch day lines at every launch since the first iPad in 2010.

He believes that based on his count of 580 customers in line for the iPad Mini launch at the flagship 5th Avenue store, demand for the iPad Mini is initially in-line with his expectations. Munster estimates that about 10% of the iPad Mini line may have been waiting for the 4th Gen iPad based on a recent survey. As a comparison, the 3rd Gen iPad line in March of this year was 750 people at the flagship store.

For the iPad Mini launch, Munster believes ‘there is significant noise around the line data.’ He notes the following headwinds facing sales.

  • New York is currently facing unique circumstances due to Hurricane Sandy that are making transportation significantly more difficult for potential iPad Mini buyers.
  • Two of the five Apple Stores in New York are closed due to power outages.
  • In Minneapolis,  outdoor customers (Uptown) are facing below 32 degree temperatures. For the Mall of America (MN) line of 35 customers, a more fair comparison would be the 3rd Gen iPad line, suggesting about a 50% decrease for the iPad Mini line.

Despite these factors, Munster continues to feel comfortable with his 1-1.5 million iPad Mini launch weekend estimate and 5 million estimate for the December quarter.

Chipworks.com recently published the floor plan and die size measurements for the A6X SoC application processor chip in the iPad 4. The A6X die was fabricated at 32nm and measures 10.4mm x 11.9mm, yielding a die area of 123 sq-mm.

This die size is 31.5% larger than the A6 chip that is used in the iPhone 5. The tear down reveals that Apple has made each of the four graphics cores approximately 61% larger, and has added chip area for increasing memory bandwidth to yield this higher die.

The 123 sq-mm size is a bit higher than analysts expected, since they did not know the extent of area increase for graphics.