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Blodget: iPad Mini Could Hurt Apple Margins

The upcoming release of the iPad Mini raises the question of what it will do to Apple’s profit margins, Business Insider CEO Henry Blodget said Wednesday on CNBC.

On “Fast Money,” he said that the iPad Mini carries a lower profit margin than the iPhone, adding that competitors’ pricing could force Apple’s hand.

(Read More: Apple Cooking Up Rumored 'iPad Mini': Report)

“If Apple was missing a key device that a lot of people wanted, especially at a price point a lot of people wanted, that could hurt them over the long haul in terms of market share. So it’s definitely smart for them to play there,” he said. “The issue is: What does it do to their margins?

“And I think with the iPad in general, and possibly, especially with the Mini, you may see that this is a much lower-margin product than, certainly, the iPhone.”

(Read More: What Every Apple Investor Should Know)

Blodget made the case for Apple entering the smaller tablet market.

“We need it because Amazon and Google and others have introduced a smaller tablet that it less expensive than the iPad, and that appears to be resonating very well with consumers. They’re selling a whole bunch of them,” he said. “Obviously, as you remember, Steve Jobs panned the smaller tablets, but people seem to like them. They’re serving a purpose, so Apple wants to play in that game, and they should. That’s a smart move.”

Blodget also added that pricing was likely a foregone conclusion.

“The most remarkable thing about Apple over last few years of this renaissance of the company is that not just been the leader on product quality, but they’ve also been the leader – at least on parity with the leader in terms of price. So, if the price point for this product, generally, is around $199, that’s probably where they’ll be,” he said.

“The question is: What does that do to the bottom line?”

Trader disclosure: On Oct. 3, 2012, the following stocks and commodities mentioned or intended to be mentioned on CNBC’s “Fast Money” were owned by the “Fast Money” traders: Brian Kelly is long QQQ; Brian Kelly is long DBA; Brian Kelly is long UNG; Brian Kelly is long NAT GAS; Brian Kelly is long CORN; Brian Kelly is long GLD; Brian Kelly is long SLV; Steve Grasso is long AET; Steve Grasso is long ASTM; Steve Grasso is long AUO; Steve Grasso is long BA; Steve Grasso is long F; Steve Grasso is long LF; Steve Grasso is long LNG; Steve Grasso is long MHY; Steve Grasso is long P; Steve Grasso is long NVIV; Steve Grasso is long PFE; Steve Grasso is long S; Steve Grasso is long WYNN; Joe Terranova is long EMC; Joe Terranova is long NXPI; Joe Terranova is long VRTS; Joe Terranova is long WFM; Joe Terranova is long SWN; Joe Terranova is long TRV; Joe Terranova is long VZ; Joe Terranova is long VLO; Joe Terranova is long CSTR; Joe Terranova is long CHKP; Joe Terranova is long GLW; Joe Terranova is short EURO CURRENCY FUTURES; Enis Taner is long AAPL PUTS; Enis Taner is long GS; Enis Taner is long GLD; Enis Taner is long YHOO CALLS.

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