Computing iPad mini numbers

In next two weeks Apple will release its earnings report. Unlike Amazon or Google they will report total number of units sold for iPad line. But Apple is not going to make it any more transparent than what is absolutely needed. So we won’t get to see the breakdown for iPad mini vs. iPad let alone the different versions within each.

One way to find the number of iPad mini sold is to do channel check and using sampling techniques to make an estimate. The other option is to do the most we can with their published numbers and try to tease out the iPad mini numbers.

See my Monte Carlo analysis for predicting iPad mini numbers in Gigaom.

Last time around, when they decided to keep the 16GB iPad2 version for $399, I showed you the math for finding number of iPad2 sold. As a refresher here is the math,

Apple reports total number of units sold and total revenue from them. I showed you to use Average Selling Price (ASP) from precious quarter as stand in for rest of iPad line and $399 as ASP for iPad2. With two unknowns and two equations we could solve for iPad2 numbers.

This time around life is little bit tricky calling for lot more assumptions (and hence uncertainty in the results). There are several unknowns

  1. How many  different iPad minis were sold? – 6 variables, one for each version
  2. How many $399 iPad2 were sold? – we should be seeing switch from iPad2 to iPad mini . That is another variable
  3. How many iPads were sold? Let us keep them all as one class and hence as just one variable. We also can use ASP from last period.

So eight different variables but still only two equations. Not enough.

Let us make more simplifying assumption (each such assumption adds uncertainty to our final answer). Let us say 70-20-10 split for 16GB, 32GB and 64GB and 70-30 split between Wifi and 3G for iPad mini. That is 70% of all iPad mini are Wifi sales and of that 70% is 16GB edition.

This assumption gives us an ASP of $408 (see model). And with this assumption we eliminated 5 variables leaving us with three – number of units sold for iPad mini, iPad2 and rest of iPad family.

Still no good. Bring in one more assumption. Let us assume iPad2 was affected such that it saw net 40% decline from Q (due to customers switching to iPad mini). This is net of any expected uptake from new customers.

Apple sold about $4.19 million $399 iPads last quarter (see model again), its new sales we estimate will be 2.5 million units.

Finally back to just two unknowns – number of iPad mini sold and number of iPads sold – and two equations.

We sure can estimate how iPad mini did. And try out the different numbers in the model to see the range of possibilities.