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

Posted:
in iPad edited January 2014
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.
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Comments

  • Reply 1 of 110
    suddenly newtonsuddenly newton Posts: 13,759member
    There were always cheap tablets. That is not what is different about the second quarter.
  • Reply 2 of 110
    rogifanrogifan Posts: 10,669member
    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....
  • Reply 3 of 110
    konqerrorkonqerror Posts: 685member
    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.
  • Reply 4 of 110
    jaaycojaayco Posts: 46member
    Does anyone seriously believe the 40% number? Maybe if we stopped comparing shipped android vs sold iPads... Who here lives somewhere that a [B]majority[/B] of tablets they see in use are something other than an iPad? It's certainly not the case here in Australia.
  • Reply 5 of 110
    jd_in_sbjd_in_sb Posts: 1,484member
    Blockbuster numbers in the fall should take care of this dip.
  • Reply 6 of 110
    lerxtlerxt Posts: 185member
    Asia is now Samsung territory, Apple product use has significantly declined. That has got to have a lot to do with it.
  • Reply 7 of 110


    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.


  • Reply 8 of 110
    robin huberrobin huber Posts: 3,268member
    IPad shipments aren't perpetually up quarter over quarter? Apple is doomed.

    (Note from three years ago: "what's an iPad?")
  • Reply 9 of 110
    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.
  • Reply 10 of 110
    drblankdrblank Posts: 3,383member
    I think there is a pent up demand for the new iPad 5 and iPad mini replacement. That's typically what happens.
  • Reply 11 of 110
    drblankdrblank Posts: 3,383member

    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.

  • Reply 12 of 110
    zoffdinozoffdino Posts: 192member
    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.
  • Reply 13 of 110
    bugsnwbugsnw Posts: 717member

    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.

  • Reply 14 of 110
    nagrommenagromme Posts: 2,834member
    Analysts inventing things out of nothing is expected to see a sharp spike year-over-year.
  • Reply 15 of 110
    jungmarkjungmark Posts: 6,704member
    bugsnw wrote: »
    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.
  • Reply 16 of 110
    anantksundaramanantksundaram Posts: 19,221member
    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.
  • Reply 17 of 110
    wizard69wizard69 Posts: 12,825member
    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.
    zoffdino wrote: »
    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.
  • Reply 18 of 110
    juiljuil Posts: 75member

    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:)

  • Reply 19 of 110
    freerangefreerange Posts: 1,589member
    lerxt wrote: »
    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.
  • Reply 20 of 110
    bugsnwbugsnw Posts: 717member

    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.

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