Apple iPad sales slumped 18% in Q1, but Cook still sees 'bright future' for platform
As many industry analysts predicted, iPad sales saw a steep year-over-year decline for the first fiscal quarter of 2015, but CEO Tim Cook is optimistic and sees great potential in Apple's upcoming hardware pipeline.
For the quarter ending in December, iPad shipments clocked in at 21.4 million units, down 18 percent from just over 26 million sold during the same period last year. The sales decline spurred a 22 percent dip in year-over-year revenue, bringing in about $9 billion this year compared to 2014's $11.5 billion performance.
Despite the slowdown, Cook is upbeat on future prospects for Apple's tablet lineup, noting his position gives him a clear view of the road ahead. He was careful not to telegraph mixed signals during an investor conference call on Tuesday, however, saying, "I'm not projecting. To be clear with everyone, I'm not projecting something very different next quarter or the next. I'm thinking over the long run." Cook also cautioned that investors may not see a "miraculous" improvement in year-over-year performance over the near term.
The statement suggests Apple may not release substantial changes to the iPad lineup in the next six months. Rumors of a supposed 12-inch "iPad Pro" have been making the rounds for months, though little hard evidence has surfaced proving its existence. In January, a photo turned up online purporting to show a 3D rendering of the alleged device. In line with previous rumblings, the image showed a speaker grille positioned near the top-mounted power button, suggesting the tablet could support stereo sound when used in landscape mode.
On the merits of iPad, Cook pointed out that recent sales statistics show a large percentage of first-time buyers, hinting at low saturation levels and room to grow. For example, 50 percent of iPad buyers in the U.S, Japan and UK were new to Apple's tablet. Looking at the booming China market, that number jumps to more than 70 percent, Cook said.
Aside from future growth, iPad usage rates are up to six times Apple's nearest competitor, he said. As defined by Cook, iPad usage is measured in total share of tablet Web browsing and commerce, which stand at 71 percent and 80 percent of those respective markets.
Overall, Cook appears to be taking a long haul approach to iPad, noting hardware, innovation and unannounced plans will keep the platform relevant for the foreseeable future.
"So I'm not predicting the 90-day clips and so forth, but over the long arc of time," Cook said. "I really believe that iPad is a great space, a great product and coupled with the product innovation we've got, I think there's a very bright future for it."
For the quarter ending in December, iPad shipments clocked in at 21.4 million units, down 18 percent from just over 26 million sold during the same period last year. The sales decline spurred a 22 percent dip in year-over-year revenue, bringing in about $9 billion this year compared to 2014's $11.5 billion performance.
Despite the slowdown, Cook is upbeat on future prospects for Apple's tablet lineup, noting his position gives him a clear view of the road ahead. He was careful not to telegraph mixed signals during an investor conference call on Tuesday, however, saying, "I'm not projecting. To be clear with everyone, I'm not projecting something very different next quarter or the next. I'm thinking over the long run." Cook also cautioned that investors may not see a "miraculous" improvement in year-over-year performance over the near term.
The statement suggests Apple may not release substantial changes to the iPad lineup in the next six months. Rumors of a supposed 12-inch "iPad Pro" have been making the rounds for months, though little hard evidence has surfaced proving its existence. In January, a photo turned up online purporting to show a 3D rendering of the alleged device. In line with previous rumblings, the image showed a speaker grille positioned near the top-mounted power button, suggesting the tablet could support stereo sound when used in landscape mode.
On the merits of iPad, Cook pointed out that recent sales statistics show a large percentage of first-time buyers, hinting at low saturation levels and room to grow. For example, 50 percent of iPad buyers in the U.S, Japan and UK were new to Apple's tablet. Looking at the booming China market, that number jumps to more than 70 percent, Cook said.
Aside from future growth, iPad usage rates are up to six times Apple's nearest competitor, he said. As defined by Cook, iPad usage is measured in total share of tablet Web browsing and commerce, which stand at 71 percent and 80 percent of those respective markets.
Overall, Cook appears to be taking a long haul approach to iPad, noting hardware, innovation and unannounced plans will keep the platform relevant for the foreseeable future.
"So I'm not predicting the 90-day clips and so forth, but over the long arc of time," Cook said. "I really believe that iPad is a great space, a great product and coupled with the product innovation we've got, I think there's a very bright future for it."
Comments
No surprise. The iPhone 6 Plus will continue to steal sales from iPad. Focus on the next generation Apple TV.
Apple needs to do something with it. They really haven't significantly improved the functionality of the iPad since iWork/iLife. Yes, there are lots of amazing apps, but Joe and Jane Consumer doesn't see that. They need a reason to buy it.
Apple iPad sales down? Clearly Apple is dying.
I still have an original iPad and it still works great and does what it needs to do - which is largely Netflix for the grandchild - occasional web browsing when the wife can't find her netbook - and I will grab it once in awhile if it happens to be the nearest iOS device - of which there are currently 12 in my house (if you could the two original iPhones which are not currently used by anyone) and only 5 people - and yes that is almost 2 devices per person - one iPhone each - and 4 iPads - and an iPod (iPod touch or 4th gen, I forget).
There may be new iPads in our future - but despite improved specs - none of them for the past couple years have been compelling enough relative to their price tag to fit in the budget after more important things are taken care of.
Eventually there will be a couple new iPads but might be next year or the year after.
Maybe a Start button will help sales?
... and offer it in brown.
I think the real issue (as others have said) is that old iPads work well. While Joe and Janr are buying new iPads, Jack and Jill consumer are happily using their three year old iPads and aren't in a rush to upgrade.
Significantly, also stated is the extremely high satisfaction ratings. Jack and Jill will be buying new iPads eventually--just not every year or two.
Anecdotally, I maxed out a 64/cellular iPad when the retina screen came out. The next version was slimmer, lighter and faster. The two airs have been even more so. I would love to have bought one of those, but mine works too well.
Speaking for myself, I use my iPad as a radio. I enjoy listening to NPR while I use my ancient MBP. I use my iPad as a cassette player in that I use it to listen to audio books, and I use it as an eReader to read any number of documents or eBooks I have on my device. My iPad is used as a sales tool, a photo album, and a messaging device. This year it became a handy way to take calls... something I didn't know I'd enjoy as much as I do.
While I bought it for being a highly portable computer, I've found I use it to replace a range of other devices ... "say 'cheese'!"
I think if more people thought of the iPad as a basic replacement for a raft of other more specialized devices, there may be a more general adoption. Right now people are still trying to pigeon-hole the iPad as [I]this[/I] or [I]that[/I]. I did that at first even while seeing the multiple utility potential.
In some sense the iPad's market is cannibalized by the iPhone and/or the laptop... but in an even broader sense, a whole plethora of other devices are being replaced by the iPad.
YES. I constantly see people on here applaud how they're iPhone 6+ is so good they don't need an iPad.
Which is why I'm not TOO stoked about iPhone sales because an %18 increase in iPhone 6 sales is stolen from iPad sales.
I thought Apple was announcing a 12" iPad to further differentiate the line but that was just a rumor.
Here's what I posted on another article earlier:
Cook says he's surprised at the [applepay]growth rate.
This is the perfect time to have an NFC POS focused iPad.
I see iPad sales are down(thanks iPhone 6+) and I think having a stronger focus on business will open up a whole market opportunity for them. I mean a HUGE untapped market, like taking over POS terminals and payment kiosks, etc.
Even taking business further by adding features to replace drive thru interfaces, plane monitors, inventory PDAs, hospital monitors etc.
***** DIFFERENTIATE APPLE!!
Yea iPads are almost like computers. You don't buy a new one every couple of years. I've got the original iPad and the iPad Air. I will not be upgrading any time soon. People would not be upgrading there phones every year or two if the cost wasn't hidden in their monthly payments.
Amazon Fire HDs are eating Apples lunch? Mayday is a game changer-plus so less expensive for what most use tablets for.
Why does nobody raise a stink with the Android tablets sells by in the dozens? Oh, right... No one gives a crap about crap. Got it.
People don't need a new iPad every 2 years.
If Americans had to pay full retail for their iPhones, they wouldn't be updating every 2 years either.
My iPad Air 2 is definitely not my most important or most-used device, but it's definitely my favorite device to use. It deserves to exist.
You're kidding, right? 18% increase in iPhone != 18% decrease in iPads.
Plus Apple doesn't need your advice. Me thinks they're doing fine on their own.
Every four years should do it.