Sole trader

iPad mini launches, but Apple forced to eat humble pie

By Patrick Stafford
Friday, 02 November 2012

Apple's latest gadget has hit Australian shores, with iPad minis being delivered to customers and stores across the country.


But the tech giant has been dealt a massive blow on what is meant to be a key day in the release calendar, with a court ruling the company must reissue an apology to Samsung that says the company did not infringe on its patents.


It's the latest development in the ongoing patent war between the two companies. Although a multibillion dollar case was awarded to Apple in the United States, the same case has been repeated in several countries with varying results.


For instance, the British High Court found that Samsung didn't infringe on Apple's iPad designs, partly because the products were "not as cool".


Apple was forced to make an apology. But now, the courts say Apple has to make that apology again and put it in a more prominent space on the company's home page.


Apple argued, but the judge wasn't having any of it.


"I would like to see the head of Apple make an affidavit about why that is such a technical difficulty for the Apple company," judge Robin Jacob said, according to the Press Association. "This is Apple that cannot put something on their own website?"


The court also said the apology was "too slippery" and emphasised some extraneous information. It even goes so far as to dictate what size font it has to use: 11-point Arial.




The decision has put a dull mood over the rest of today, with the first iPad minis heading out to customers. And while analysts have expected the tech giant to sell millions of the gadgets in the weeks leading up to Christmas, today's debut is actually a little lacklustre.


In fact, SmartCompany has heard although Apple expected as many as tens of thousands of orders, the actual sales figures were less than half of that.Â


Over at the Whirlpool forums, users report only a handful of customers signing up outside official Apple stores.


This morning, one user reported only nine people in line at the George Street store in Sydney, while only four stood at the Robina store this morning. However, users on Twitter report dozens more at separate stores.


While the release may be cited as evidence the Apple gloss is fading on its usually exciting retail launches, the fact the iPad mini is available in so many stores has negated the need to line-up at an official Apple location.


"Looks like most ordered it online," one Whirlpool user noted. The fact the 4G version isn't out for a couple of weeks has also dampened sales.


Meanwhile, there remains some fear the iPad mini could end up cannibalising the iPad's overall sales goal. With a lower margin on the new gadget, that could be a big problem.


Tech-Thought analyst Sameer Singh has written the new device could have as much as a 50% cannibalisation rate of existing iPad sales, citing data from the recent patent trial that showed the iPad 2 affected iPad sales by up to 61%.


However, TechCrunch reports Sterne Agee analyst Shaw Wu as saying it predicts 25 million iPad sales for the December quarter, up by 10 million last year.


He also expects iPad mini sales to be "mostly incremental".


Piper Jaffray analyst Gene Munster made a similar statement – saying that Apple will sell five million iPad minis this December quarter, and 20 million full-sized iPads.


That estimate is down one million from his previous estimate.


"We believe that the smaller iPad could cannibalize one million regular iPad units in December or a rate of cannibalization at 20 percent," Munster said, according to All Things Digital. "[So] for every five million smaller iPads, you lose one million standard iPads."


This story first appeared on SmartCompany.

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