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iPad shipments could see first ever year-on-year decline in Q2, analyst says

post #1 of 101
Thread Starter 
Due to a combination of seasonality and heightened competition from Android device makers, shipments of Apple's iPad may see a year-on-year drop for the first time since debuting in 2010, says KGI analyst Ming-Chi Kuo.

iPad mini


In a note to investors obtained by AppleInsider, Kuo said that overall iPad shipments will experience a quarter-to-quarter decline of 20 to 25 percent, or 10 to 15 percent year-on-year, for the second quarter of 2013. The analyst based his prediction on sell-through, which is expected to hit 14 to 15 million units for the three-month period.

The dip shipments is thought to be a result of a glut of cheap Android tablet offerings this year, as well as a high comparison base from 2012 when the third-generation iPad launched.

Driving the decline is lowered iPad mini shipments, which are believed to see a roughly 40 percent quarter-on-quarter drop. Overall, Kuo forecasts a sell-in of around 12.7 million units for the three month period ending in June. Breaking the numbers down by model, the iPad mini is expected to see 6.2 million units shipped, while the latest fourth-generation iPad will see 4.5 million units. The entry-level iPad 2 will likely come in at around 2 million units shipped.

Finally, Kuo notes the third quarter will see growth as seasonality and an expected launch of a fifth-generation iPad boost shipments to first-quarter levels. However, the analyst points out that success is highly contingent on how attractive the supposedly slimmed-down "iPad 5" is to consumers.

A recent study conducted by IDC saw the iPad's share of the overall table market dip to 40 percent during the first quarter of the year. Year-over-year growth was still positive at 65 percent, but rival manufacturers Samsung and ASUS saw their share of the sector jump 283 percent and 350 percent from the year ago period, respectively.
post #2 of 101
There were always cheap tablets. That is not what is different about the second quarter.

"Apple should pull the plug on the iPhone."

John C. Dvorak, 2007
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"Apple should pull the plug on the iPhone."

John C. Dvorak, 2007
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post #3 of 101
Hmm...a retina mini and thinner/lighter 5th gen iPad probably coming in the fall....nah that couldn't have anything to do with decline....
post #4 of 101
Quote:
Originally Posted by Suddenly Newton View Post

There were always cheap tablets. That is not what is different about the second quarter.

The difference is that cheap people are getting around to buying tablets. And people who aren't cheap already bought theirs.
post #5 of 101
Does anyone seriously believe the 40% number? Maybe if we stopped comparing shipped android vs sold iPads... Who here lives somewhere that a majority of tablets they see in use are something other than an iPad? It's certainly not the case here in Australia.
post #6 of 101
Blockbuster numbers in the fall should take care of this dip.

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post #7 of 101
Asia is now Samsung territory, Apple product use has significantly declined. That has got to have a lot to do with it.
post #8 of 101

Something very fishy here.  This story is current, right?  And the analyst is predicting second quarter Apple results?

 

Quote:
Kuo said that overall iPad shipments will experience a quarter-to-quarter decline of 20 to 25 percent, or 10 to 15 percent year-on-year, for the second quarter of 2013. 

 

Apple reported Second Quarter 2013 results on April 23rd, almost a month ago.

http://www.apple.com/pr/library/2013/04/23Apple-Reports-Second-Quarter-Results.html

 

So Mr. Kuo can't even get his predictions right IN HINDSIGHT...  This quote from the Apple link above:

 

Quote:
Apple also sold 19.5 million iPads during the quarter, compared to 11.8 million in the year-ago quarter.

 

Now perhaps he's trying to make some statement about calendar year quarter 2, rather than fiscal year quarter 2, but in that case since Apple's quarters vary from other companies, it's going to be difficult to make an apples-to-apples comparison.  Either way, I think Mr. Kuo is an apple short of a full bushel.

post #9 of 101
IPad shipments aren't perpetually up quarter over quarter? Apple is doomed.

(Note from three years ago: "what's an iPad?")
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A.k.a. AppleHead on other forums.
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post #10 of 101
It is not really a fair YOY quarter comparision as last years quarter had a new iPad released in it while this years quarter has no new iPads.
post #11 of 101
I think there is a pent up demand for the new iPad 5 and iPad mini replacement. That's typically what happens.
post #12 of 101
Quote:
Originally Posted by Robin Huber View Post

IPad shipments aren't perpetually up quarter over quarter? Apple is doomed.

(Note from three years ago: "what's an iPad?")

You have to compare quarters to the same quarter in the previous year.  The thing that people forget is that they don't have consistent announcement dates of product launches.  It's hard to do since they rely on component suppliers and that's not consistent either for new components to be released.

 

Now, Apple's biggest quarter for the year is historically the Christmas quarter and it goes progressively down for the following 3 quarters and then BLAMO Christmas time again.

 

Each Christmas has been getting bigger year after year, Each March quarter gets bigger year after year, so does the June quarter and Sept quarter.

 

This year due to product shortages of the iPhone 5, iPad mini and iMacs have kind of hampered Apple to be able to get more business, plus there are more pressures from guys like Samsung, Microsoft, etc.

 

I think this product release year of what gets announced starting in June should give the consumers more of what they want.  The Haswell chip is going to be a better jump from Ivy Bridge, than Ivy Bridge was from Sandy Bridge.   In addition, if they really do announce 802.11ac, that's a HUGE jump for wireless and that's something the market has WANTED.. Then you have the MacPro which should HOPEFULLY sell quite well compared to the last 3 years.  Apple, as far as I'm concerned, should have come out with a larger iPhone to go after what is an obviously growing trend in smartphones.  Also, adding things like IR would be a great idea, NFC (providing it's secure), faster processors, more RAM, yada, yada, yada.

 

I thought the iPad mini should have been announced at the same time as the iPad 2, since that's really what it is.  It's nice, but it's not what they SHOULD have come out with when they announced the iPad 4.

 

I think Apple just needs to step it up a notch and start leading than following with their product releases.

 

The other interesting thing Apple might be announcing is introducing Fingerprint ID technology.  Which products?  Don't know, but that might be a game changer, especially for corporations, government, and military markets.

 

I look forward to the upcoming OS X and iOS releases that they'll show next month.

 

Doomed? NOPE.  Just delayed a little.  Also, we have to see what/if Apple releases HD TVs and an updated Apple TV box.

post #13 of 101
Tim Cook is shooting himself and Apple in the foot by moving all product launches to the fall. Customers are bombarded with Apple news for 3 months, then nothing for the other 9. That creates a gapping hole in a highly competitive market. Apple needs to spread out those product introductions, otherwise, the sales will be too concentrated toward the end of the year, and it won't get enough media coverage for the rest of the year.
post #14 of 101
Quote:
Originally Posted by zoffdino View Post

Tim Cook is shooting himself and Apple in the foot by moving all product launches to the fall. Customers are bombarded with Apple news for 3 months, then nothing for the other 9. That creates a gapping hole in a highly competitive market. Apple needs to spread out those product introductions, otherwise, the sales will be too concentrated toward the end of the year, and it won't get enough media coverage for the rest of the year.

 

Yeah, I agree with this and I think Steve Jobs did too. I remember him at some keynote proclaiming that Apple was going to move to a semi-annual update cycle for Macs, more closely matching Intel's upgrade cycle and keeping a step ahead of the competition. The usual cycle was to buy a Mac and by the time a new one was introduced, it seemed slow by current market standards.

 

It seems like innovations are happening quickly enough that there might be an incentive to half-year upgrade cycles. If not, I think it might not hurt to spread it around. It does seem like we've gone a LONG time without anything to knock our socks off. The competition has an unfair advantage. Stuff is coming out every day. It makes Apple seem (and the press report) that Apple has ceased innovating.

 

I don't think the iPad numbers will disappoint. There is pent up demand for a retina display on the mini and a truly redesigned, thinner, cooler, longer battery lived iPad.

post #15 of 101
Analysts inventing things out of nothing is expected to see a sharp spike year-over-year.
post #16 of 101
Quote:
Originally Posted by bugsnw View Post

Yeah, I agree with this and I think Steve Jobs did too. I remember him at some keynote proclaiming that Apple was going to move to a semi-annual update cycle for Macs, more closely matching Intel's upgrade cycle and keeping a step ahead of the competition. The usual cycle was to buy a Mac and by the time a new one was introduced, it seemed slow by current market standards.

Semi annual for Macs? You have a link? I highly doubt that was the case. It wouldnt make sense either because after three months, if you want to get a new Mac you can wait 3 months for a new release.
post #17 of 101
1) Thank you, AI, for not using "noted" in your reference to this analyst.

2) As people have pointed out, this is likely just a case of potential customers waiting for a product refresh.

3) Couldn't agree more with the point that Apple is making a mistake by waiting until September to announce a whole slew of new products.
post #18 of 101
WWDC is in a couple of weeks, there will be new products announced on or before WWDC. If you think Apple is actually waiting until the end of the year to release new products you have lost touch with the Apple way. Now they may not be the products you personally are looking for but they are products none the less.

I find it hard to believe people put so much stock into the rumor mill.
Quote:
Originally Posted by zoffdino View Post

Tim Cook is shooting himself and Apple in the foot by moving all product launches to the fall. Customers are bombarded with Apple news for 3 months, then nothing for the other 9. That creates a gapping hole in a highly competitive market. Apple needs to spread out those product introductions, otherwise, the sales will be too concentrated toward the end of the year, and it won't get enough media coverage for the rest of the year.
post #19 of 101
Quote:
Originally Posted by wizard69 View Post

WWDC is in a couple of weeks, there will be new products announced on or before WWDC. If you think Apple is actually waiting until the end of the year to release new products you have lost touch with the Apple way. Now they may not be the products you personally are looking for but they are products none the less.

I find it hard to believe people put so much stock into the rumor mill.

 

Your thoughts reflect exactly mine, so I give you a big Google-y +1 (and save myself the effort to type it down:)

post #20 of 101
Quote:
Originally Posted by Lerxt View Post

Asia is now Samsung territory, Apple product use has significantly declined. That has got to have a lot to do with it.
Wow! That must be why Apple's revenues in Asia have dropped, and especially in China! Oops - just checked. No they haven't! No question that Samsung has made huge inroads in Asia, but mostly at the expense of others, not Apple.
post #21 of 101
Quote:
Originally Posted by jungmark View Post


Semi annual for Macs? You have a link? I highly doubt that was the case. It wouldnt make sense either because after three months, if you want to get a new Mac you can wait 3 months for a new release.

 

You're right. I don't have a link, even after searching Google and Bing for a bit. I did find a MacRumors board where it was discussed:

 

http://forums.macrumors.com/showthread.php?t=198217

 

I think I was wrong. It could have been SJ talking about more rapid OS updates:

 

http://appleinsider.com/articles/07/10/22/steve_jobs_talks_future_mac_os_x_upgrades_mac_sales_and_more

 

Apple has such high volume now (for iOS devices) that aiming for semi-annual hardware updates could prove to be quite difficult. They'd be barely up to speed on v3 and trying to gear up for v4. Ramping up production to meet demand has proven difficult.

 

Maybe in the future.

post #22 of 101
Quote:
Originally Posted by zoffdino View Post

Tim Cook is shooting himself and Apple in the foot by moving all product launches to the fall. Customers are bombarded with Apple news for 3 months, then nothing for the other 9. That creates a gapping hole in a highly competitive market. Apple needs to spread out those product introductions, otherwise, the sales will be too concentrated toward the end of the year, and it won't get enough media coverage for the rest of the year.

Sometimes they can't help it.   With their Intel powered products, they have to wait for Intel to release their chips.  There are also Broadcom chips for 802.11ac, new screens from whomever, new processors for their i-mobile devices, etc.   They can't always help when the components will be ready to go to mfg.

 

Apple typically likes having SOME announcement each quarter.  Their last announcement was Oct., so a product announcement in June will be basically 7 months, and then there will product announcements ongoing until before Nov.  So, they'll have 6 months to do all of their product announcements for the year.

post #23 of 101
Of course the sales of Android tablets is increasing - people are replacing their cheap tablets when the battery dies or they can no longer run apps on their outdated systems. On the other hand my iPad 2 is still performing like the day it was bought.
post #24 of 101
Quote:
Originally Posted by drblank View Post

Sometimes they can't help it.   With their Intel powered products, they have to wait for Intel to release their chips.  There are also Broadcom chips for 802.11ac, new screens from whomever, new processors for their i-mobile devices, etc.   They can't always help when the components will be ready to go to mfg.

Apple typically likes having SOME announcement each quarter.  Their last announcement was Oct., so a product announcement in June will be basically 7 months, and then there will product announcements ongoing until before Nov.  So, they'll have 6 months to do all of their product announcements for the year.

I feel the pain of people wondering what's the deal in the lack of any new annoucements. But... I kinda feel that last year they --Apple had to make some significant production and inventory changes -- the new smaller power/data plug on the iPhone/iPad mini etc. the shrinking of ALL the internal parts -- changes in the size of parts in iMac -- the map
Debacle and staff changes in iOS development / retail -- the lack of Steve Jobs vacuum -- power struggles -- competitive pressures -- and development of new categories -- I think what many of us forget is that rapid insane expansion also requires ADDITIONAL INFRASTRUCTURE on every level within the company... You can add infrastructure carefully or stupidly and suffer damage to the BRAND..

Judging by the delays it looks to me like the rush to be first has been abandoned by lessons learned to waiting and getting it right...

Lets face it.. Another map PR situation would be quite frankly -- a brand torpedo...

The eyes on Apple (and their PR/Marketing teams knows this) will be ever more scrutinized -- I mean this keynote will be crucial -- 8 months since the last one -- believe me -- the pressure is ON.. I expect some sweeping changes to iOS..

On another note -- was in TWO Best Buy stores in the L.A. Market... The Same-sung designated sales and display areas are pretty tight.. Both positioned UP front -- just after you enter the stores -- with Apples area against the walls in the back -- knowing that this space usually is rented by the manufacturers -- Same-sung has spent a fortune for this presence -- a smart move...this alone presents a perception issue in these stores..
post #25 of 101

I know Ming-Chi Kuo has a history of being right in his predictions, but there's also a history of people underestimating the iPad that goes right back to it's inception. I think the numbers will be up.

post #26 of 101
What goes up, also tends to come down (*see also share prices)

NB. - whatever the company
post #27 of 101

Where's that Gartner guy they hired recently?? Time to put him to good use

post #28 of 101
Quote:
Originally Posted by ascii View Post

I know Ming-Chi Kuo has a history of being right in his predictions, but there's also a history of people underestimating the iPad that goes right back to it's inception. I think the numbers will be up.
Underestimating what? It isn't like something materially changed about the product since last quarter. The sales rate probably decayed like any other 2nd quarter after product release.
post #29 of 101
Sounds like another Samsung lackey.

Eph

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Eph

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post #30 of 101
Quote:
Originally Posted by ascii View Post

I know Ming-Chi Kuo has a history of being right in his predictions...

Like what?
post #31 of 101
There is not a real compelling reason to upgrade now. If you own an ipad 2 or later, the functionality is not much greater. Minor spec bumps and minor increased software functionality are not to going to convince the masses to upgrade. I will probably continue to use my ipad 2 until the battery completely dies. The retina display that came out a year ago is not a good enough reason for me to drop several hundred dollars on a new one.
post #32 of 101
Quote:
Originally Posted by gijoeinla View Post

I feel the pain of people wondering what's the deal in the lack of any new annoucements. But... I kinda feel that last year they --Apple had to make some significant production and inventory changes -- the new smaller power/data plug on the iPhone/iPad mini etc. the shrinking of ALL the internal parts -- changes in the size of parts in iMac -- the map
Debacle and staff changes in iOS development / retail -- the lack of Steve Jobs vacuum -- power struggles -- competitive pressures -- and development of new categories -- I think what many of us forget is that rapid insane expansion also requires ADDITIONAL INFRASTRUCTURE on every level within the company... You can add infrastructure carefully or stupidly and suffer damage to the BRAND..

Judging by the delays it looks to me like the rush to be first has been abandoned by lessons learned to waiting and getting it right...

Lets face it.. Another map PR situation would be quite frankly -- a brand torpedo...

The eyes on Apple (and their PR/Marketing teams knows this) will be ever more scrutinized -- I mean this keynote will be crucial -- 8 months since the last one -- believe me -- the pressure is ON.. I expect some sweeping changes to iOS..

On another note -- was in TWO Best Buy stores in the L.A. Market... The Same-sung designated sales and display areas are pretty tight.. Both positioned UP front -- just after you enter the stores -- with Apples area against the walls in the back -- knowing that this space usually is rented by the manufacturers -- Same-sung has spent a fortune for this presence -- a smart move...this alone presents a perception issue in these stores..

Not to mention, on your first point, the two very significant display changes that Apple made last year, the GF2 screens that defined the shape and weight of the iPad mini, and the missing piece of glass/new lamination process that mostly create the "stunning" effect of the new iMacs. Both of these new refinements in the displays caused production problems, so we know by that we are dealing with cutting edge production technologies.

People act like new products can be just thought up and conjured into existence. As you say, every change depends on laying out new infrastructure. You need machines and fabrication lines and most of all engineers that have never before come together to make a new device or a new aspect of a device.

It is a complex and far-flung problem, evidently, to start making indium/galium oxide touch thin film membranes in the millions of yardage needed for the iPad mini. Now that they've practiced on the mini, they can think about doing in for the 10-inch iPad—when the process has been engineered into readiness, and only then.

Apple sweats these details like no other company in consumer tech ever has, and there are just so many engineers on earth that they can draw upon to get things like this done. And just so much room or human resources ecosystem at the old small-scale headquarters in Cupertino. They will be changing that, but not for a few years.

"But Samsung can release multiple models throughout the year . . . etc. etc." Samsung has legions of engineers and chip and display fabs to draw on, and they're not hindered by perfectionism or aesthetics like Apple is. They won't copy that part of the equation because they can't, even once they get their design center going in San Jose. The design philosophy isn't there. Meanwhile they're driven by boundless competitiveness, military discipline and shady ethics.

This business of spring or fall release schedules is we who know nothing about the production technology doing armchair supervising. Like most of what i'm doing here as well, from a cautionary point of view.
post #33 of 101
Originally Posted by Lerxt View Post
Asia is now Samsung territory, Apple product use has significantly declined. That has got to have a lot to do with it.


No, it isn't.


Originally Posted by zoffdino View Post
Tim Cook is shooting himself and Apple in the foot by moving all product launches to the fall. Customers are bombarded with Apple news for 3 months, then nothing for the other 9. That creates a gapping hole in a highly competitive market. Apple needs to spread out those product introductions, otherwise, the sales will be too concentrated toward the end of the year, and it won't get enough media coverage for the rest of the year.

 

Who says that is what is happening? My stars.

 

Originally Posted by jungmark View Post
Semi annual for Macs? You have a link? I highly doubt that was the case.

 

Why does he need a link? Macs were updated once every six months for roughly a decade. How'd you forget that? Even I remember it, and that's ludicrous.


Originally Posted by msuberly View Post
There is not a real compelling reason to upgrade now. If you own an ipad 2 or later, the functionality is not much greater.

 

Enough with the FUD.


Minor spec bumps and minor increased software functionality are not to going to convince the masses to upgrade.

 

GOOD THING THERE HASN'T BEEN ANYTHING REMOTELY CLOSE TO A "MINOR" BUMP SINCE THE IPAD 2 CAME OUT, HUH.


The retina display that came out a year ago is not a good enough reason for me to drop several hundred dollars on a new one.

 

What about the ability to actually use new software on it? And how old are your eyes, for reference?

Originally posted by Marvin

Even if [the 5.5” iPhone exists], it doesn’t deserve to.
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Originally posted by Marvin

Even if [the 5.5” iPhone exists], it doesn’t deserve to.
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post #34 of 101
Quote:
Originally Posted by Suddenly Newton View Post

There were always cheap tablets. That is not what is different about the second quarter.

Yep. When was the newest iPad launched last fiscal year. In feb/march.

And this year. Nov. so of course given that bulk of sales are in the launch, double that it was holiday shopping as well, sales now will be down compared to the previous quarter and last year when the launch was 'this' quarter.

The lack or presence of android has little to do with it since the majority of those that would buy an android tablet were never going to buy an iPad cause they are too expensive, too locked down etc.

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post #35 of 101
Quote:
Originally Posted by drblank View Post


I thought the iPad mini should have been announced at the same time as the iPad 2, since that's really what it is.  It's nice, but it's not what they SHOULD have come out with when they announced the iPad 4.

It's easy to say that in hindsight but its also erroneous. The iPad Mini would never have come out before it did due to one major factor. Steve Jobs. He didn't believe a smaller iPad would be Apple quality or even really sell (without being returned a few days later). He said as much. For the Mini to be released he needed to be convinced or for Tim Cook to be convinced and do it after Steve retired. Which is likely what happened.

And no it isn't the same as the iPad 2. Your statement is based on an erroneous detail, that being the screen size. Check the specs, it's not the same PPI but the same resolutions a smaller screen which means a denser PPI. The math has been calculated on its 'retina' standing (based on Apple's mathematical definition) and its between 85-90% retina level already which is much better quality than the iPad 2

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post #36 of 101
Quote:
Originally Posted by Tallest Skil View Post

Why does he need a link? Macs were updated once every six months for roughly a decade. How'd you forget that? Even I remember it, and that's ludicrous.

TS, I just checked the wiki and Macs haven't been updated within six months of the last release in the last decade+. New sizes don't count.
post #37 of 101
Originally Posted by jungmark View Post
TS, I just checked the wiki and Macs haven't been updated within six months of the last release in the last decade+. New sizes don't count.

 

We have a wiki? I'm going off of MacTracker.

Originally posted by Marvin

Even if [the 5.5” iPhone exists], it doesn’t deserve to.
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Originally posted by Marvin

Even if [the 5.5” iPhone exists], it doesn’t deserve to.
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post #38 of 101
Quote:
Originally Posted by drblank View Post

Sometimes they can't help it.   With their Intel powered products, they have to wait for Intel to release their chips.  There are also Broadcom chips for 802.11ac, new screens from whomever, new processors for their i-mobile devices, etc.   They can't always help when the components will be ready to go to mfg.

 

 

 

Yep. They are in a damned if you do game.

 

If they release without the new stuff some group dumps on them. If they wait, some other group dumps on them. 

If they announce before something is ready to go, this group dumps on them with claims of delays, issues etc. If they wait, this other group dumps on them for not announcing 

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post #39 of 101
Quote:
Originally Posted by msuberly View Post

There is not a real compelling reason to upgrade now.

 

Not for you, but you aren't the universal mind. Lots of folks disagree with you and did and will upgrade. Particularly when we have no idea what the iPad 5 and Mini 2 will look like. 

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post #40 of 101
Quote:
Originally Posted by Barrett Falter View Post

iOS is stale looking.....

Groan. Tell us why it's 'stale'? And more importantly, what specific features of Android make it so unstale?

Or can we just chalk it up to more troll garbage?
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