More expensive iPad Pro helps boost Apple Q3 revenues despite lower unit sales

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in iPad
Revenue-wise, the iPad Pro appears to have helped Apple make the iPad its only growing hardware segment during the June quarter, despite the category actually registering yet another drop in sales.




iPad revenues rose 7 percent year-over-year to $4.876 billion, even with units falling 9 percent from 10.251 million to 9.95 million, according to Apple's quarterly breakdown. In contrast, Mac and iPhone revenues were down 13 and 23 percent, respectively.

The company's "other products" category -- including the Apple TV, Apple Watch, and Beats accessories -- saw revenue slide 16 percent to $2.219 billion.

iPad sales have been on a continuous decline for many quarters. The trend has been blamed on a variety of factors, such as the rise of smartphones over 5 inches -- like the iPhone 6s Plus -- and slower upgrade cycles. While phones are often replaced every two to three years, tablets can sometimes be kept for four years or more.

The iPad Pro likely reversed the associated revenue slide because of price hikes. The 9.7-inch model starts at $599, $100 more than the company used to charge for similarly-sized iPads. The 12.9-inch tablet is even more expensive, ranging from $799 to a whopping $1,229 before adding in accessories like an Apple Pencil or Smart Keyboard.

Comments

  • Reply 1 of 7
    These are amazing and wonderful products and worth every penny!
    mike1
  • Reply 2 of 7
    schlackschlack Posts: 708member
    Wonder if they would have had a lot more sales if they had priced the iPad Pro at $500. The boosted cost was the number one reason I decided not to upgrade from my iPad Air.
  • Reply 3 of 7
    Rayz2016Rayz2016 Posts: 6,957member
    schlack said:
    Wonder if they would have had a lot more sales if they had priced the iPad Pro at $500. The boosted cost was the number one reason I decided not to upgrade from my iPad Air.
    Apple cares more about revenue than sales volume. That's why they don't price it at $1, which would really boost sales, though with an obvious downside. 
    mac fanmike1brucemc
  • Reply 4 of 7
    mac fanmac fan Posts: 87member
    Apple generally doesn't do loss leader pricing, for good reason. They don't aim for the bottom tier, and barely for the middle tier. 

    If they sold the Pro 9.7 for $500, they may as well drop the Air 2 completely, instead of just dropping the price by $100.
    edited July 2016 mike1ration al
  • Reply 5 of 7
    Yes, the higher priced iPad Pro probably caused a bump in revenue, but this is a trick that they can only do once (they can't bump up prices every quarter). I'd say this is a one-time bump more than anything else. The only bit of good news is that the sales decline wasn't as steep as before, although that may be attributable to pent-up demand for a new 9.7" model.
  • Reply 6 of 7
    haarhaar Posts: 563member
    schlack said:
    Wonder if they would have had a lot more sales if they had priced the iPad Pro at $500. The boosted cost was the number one reason I decided not to upgrade from my iPad Air.
    I upgraded (from iPad Air to iPadPro 9.7 )and did not regret it... (The price was "killer" 1500 including the taxes, 128GB+cell , case, and pencil and applecare) The ipad Pro 9.7 has truetone, is faster, has better colors... The antireflective coating superior. 
    The web surfing on the iPP9.7 is significantly faster (on 9.3.3... 10 beta 1 is seemed slower... Went back to 9.3.3)

    just get the iPad Pro 9.7 for the better color management, and the dci-p3 color space.  
    after using the true-tone feature for a while you do not want to go back... Funny thing if you turn off the true-tone on the iPP9.7 still looks better than the ipad Air...
  • Reply 7 of 7
    k2kwk2kw Posts: 2,048member
    schlack said:
    Wonder if they would have had a lot more sales if they had priced the iPad Pro at $500. The boosted cost was the number one reason I decided not to upgrade from my iPad Air.
    This higher price/fewer units will probably mean fewer developers for the iPad platform.   Big question is how they will do over the next 4 quarters, probably a lot, lot fewer - back to double digit YoY declines.
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