Apple’s (NASDAQ:AAPL) first official report on iPad mini and fourth-generation iPad sales has given JPMorgan analyst Mark Moskowitz reason for optimism. Moskowitz wrote in a research note to clients that the 3 million unit sales figure “is significant, as it doubles the first weekend launch of the 3rd-generation iPad of 1.5 million units (Wi-Fi only) in March 2012.”
According to the analyst, the iPad mini expands Apple’s offerings to give the company another leg-up over PC sales. “This level of early adoption of the new iPad mini could restore significant upside potential down the road, as the product expands Apple’s tablet market coverage,” Moskowitz wrote. “In our view, the iPad mini stands to target price-sensitive users and the e-reader crowd. Given the global economic uncertainty, we think price-sensitive users could gravitate toward an iPad mini instead of making a PC purchase. Our view is that the incremental use case is more differentiated for first-time tablet users. In tough times, unique or “feel good” purchases can be more amenable to end users, which gives the edge to the tablet versus the PC, in our view.
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The 7.9-inch tablet has also been conceptualized to take on competition from rival products of Amazon (NASDAQ:AMZN) and Google (NASDAQ:GOOG), among others. The iPad mini opened for pre-orders on October 26 and reached stores in the U.S. and 33 other countries on November 2. While the first models available for sale were Wi-Fi-only, data-enabled versions will arrive later this month. The iPad mini starts at $329 for the Wi-Fi model. The updated version of the 9.7-inch iPad starts at $499.
Apple announced on Monday that it sold a combined 3 million units of the two new tablets. Supply issues clearly also plague at least the smaller tablet. “Demand for iPad mini exceeded the initial supply and while many of the pre-orders have been shipped to customers, some are scheduled to be shipped later this month,” Apple said in the statement.
Moskowitz has an Overweight rating on Apple shares and a $770 price target.
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