Apple iPad decline continues with 19 percent drop in holiday quarter

Posted:
in iPad edited January 2017
In contrast with Mac and iPhone performance, the iPad continued a long-term decline in Apple's first fiscal quarter of 2017, seeing shipments fall 19 percent year-over-year.




For the holiday quarter, iPad sales fell to just over 13 million units from more than 16.1 million in the year ago period, Apple revealed in official data released on Tuesday. Accordingly, iPad revenue was down 22 percent from just over $7 billion to about $5.5 billion.

With some exceptions, iPad sales have been shrinking for the past few years. Compared with the first quarter of 2015, in fact, the company shipped over 8 million fewer units.

The iPhone saw shipments of about 78.3 million during the most recent quarter, up 5 percent. Mac units were up 1 percent to just under 5.4 million. All told, the company hit record quarterly revenue of $78.4 billion.

In comments during an investor conference call on Tuesday, CFO Luca Maestri said sales were higher than expected, noting iPad captured 85 percent of the market for tablets costing more than $200. The company's earnings release further touted satisfaction and business adoption in a subsequent conference call.

Aside from the usual rosy commentary, iPad still dropped year-over-year. The likely reason is that Apple didn't refresh anything in the iPad lineup in the fall, except to add more storage to the Air 2 and Mini 4, and drop prices on 9.7- and 12.9-inch iPad Pros.

Apple is rumored to be saving major updates for later this year, preparing three new models: updated 9.7- and 12.9-inch tablets, but also a 10.5-inch device, possibly with a sharper display.

The 9.7-inch tablet is expected to get minimal changes, becoming a budget model. There's no indication that Apple plans to update the iPad mini. A second-generation Apple Pencil could have magnets and a pocket clip.
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Comments

  • Reply 1 of 29
    Lagging sales might just have a teensy, weeny bit to do with iPhone 7+ cannibalizing iPad sales. I know this comment is way out there, but …
    radarthekatwatto_cobrabadmonkcalialbegarc
  • Reply 2 of 29
    CuJoYYC said:
    Lagging sales might just have a teensy, weeny bit to do with iPhone 7+ cannibalizing iPad sales. I know this comment is way out there, but …
    I used to sell my iPad every year on eBay after the iPad 2.  The lack of Retina was my only gripe then. So Retina was huge deal. But the iPad 3 kind of heavy. iPad Mini took care of that... but no retina. Than they came with the Air, nice and light. Then the Retina Mini (I had two iPads) Then the Air 2 added more Ram and got a little thinner. I haven't sold my iPad Air 2 but did sell my Mini Retina because of my iPhone 7 Plus.

    I think there is a reason why the iPad Air 2 hasn't been updated. Great tablet. No need to upgrade, unless you're dying for the really expensive pen and really expensive Pro models (with keyboard, might as well buy a MacBook at them prices. Which I did).





    edited January 2017 jahbladeradarthekatwatto_cobranetmagealbegarc
  • Reply 3 of 29
    rwesrwes Posts: 165member
    CuJoYYC said:
    Lagging sales might just have a teensy, weeny bit to do with iPhone 7+ cannibalizing iPad sales. I know this comment is way out there, but …
    Not that far out there. I know a lot of people who use their 6+, 6s+ and 7+ like I use my iPad. I would suspect, as has been stated frequently too though, the much lower replacement cycles.
    watto_cobracali
  • Reply 4 of 29
    I'd say the rumor of new iPads in the Spring did not help them.  I plan to replace mine, but honestly you have to think about it when it costs you $900
    tallest skilwatto_cobranetmagealbegarc
  • Reply 5 of 29
    FatmanFatman Posts: 291member
    People replace a phone about every 29 months - high unit sales reflect new buyers, convertors from other platforms, and upgraders from a prior model. Phones sell one per person and they may need replacement due to damage prior to the 29 month mark. Tablets have longer replacement cycles, I guess double that of a phone (maybe a reader has a stat on this?). Often tablets are shared (say one per family/classroom, etc). So ... they sell less units and they are replaced less frequently. Plus tablets aren't subject to replacement due to damage as often as phones since people aren't using them as 'actively'. In order to sustain growth, NEW buyers are needed annually, this is challenging since the market is smaller and arguably shrinking(?) since, as prior comment states, larger 'phablets' have replaced the need for tablets in some situations.
    watto_cobraStrangeDays
  • Reply 6 of 29
    The iPad is a very nice machine. Very long lived too. 

    I still use my original iPad on occasion. I only upgraded just last year when the large screen iPad Pro was released. 

    My next upgrade will be to a MacBook Pro. I am waiting for Intel to get on the ball regarding their 3D XPoint memory product. And I will likely upgrade the iPad also when Apple includes the NVM memory product in the device also. 

    The iPad lasts and lasts. Such a great product. It makes for a light upgrade cycle and the likely reason for the sales declines. It is far better than anything from the competition. 
    jahbladebrucemcpscooter63watto_cobraStrangeDaysnetmagebadmonkpatchythepiratecali
  • Reply 7 of 29
    iPad is a great product, but frankly it's expensive compared to Android-based alternatives. I also don't really consider the MS Surface as an equivalent competitor since the Surface is really more of a PC with 'tablet-like' functionality. The reality is that iPad seems to be caught in-between the iPhone 7+ and MacBook Air within Apple's product line...
  • Reply 8 of 29
    bcubed1979bcubed1979 Posts: 4unconfirmed, member
    For God's sake, revitalize the Mac lineup, introduce something truly differentiating for the iPhone and make the iPad more versatile (more MacOS -like). At some point, it would be great to have one AppleOS for all devices.
    brucemc
  • Reply 9 of 29
    Not everyone wants a laptop in tablet clothing. My aging original iPad Air was due for replacement and I hoped for the lighter and better version of the Air 2. Instead, an artist's studio that was even heavier than my old Air. I just want to consume content, not create it. So, I am sitting on my wallet until Apple offers an iPad for the rest of us. No wonder sales are down. 
  • Reply 10 of 29
    k2kwk2kw Posts: 1,740member
    For God's sake, revitalize the Mac lineup, introduce something truly differentiating for the iPhone and make the iPad more versatile (more MacOS -like). At some point, it would be great to have one AppleOS for all devices.
    They added a keyboard with the smart connector to the iPad Pro.  They needed to add mouse support too.   They already support one pointing device - the pencil.   That and make it easier to print.   Then for a lot more people it could be a laptop replacement.

    I bought one printer that was supposed to be an AirPrint printer for my dad but could set it up on his old network because he doesn't have a Mac or PC.   Are there any printers that will just work with AirPrint?
  • Reply 11 of 29
    brucemcbrucemc Posts: 1,527member
    Considering that the Mini 4 was over 1 year without model update, and Air 2 is 2 years, with the high end 12.9" Pro over a year - 13M units actually seems quite good.  Sort of against the odds.  I guess that is why mgmt said they expected lower. 

    Not it sure why Apple didn't update the line in at least the SoC, screens, camera. I am hoping it is because they want to move the iPads back to the spring, to even out the year some more (people can't buy everything in the holiday quarter. 
    netmagepatchythepiratecali
  • Reply 12 of 29
    MplsPMplsP Posts: 1,374member
    karmadave said:
    iPad is a great product, but frankly it's expensive compared to Android-based alternatives. I also don't really consider the MS Surface as an equivalent competitor since the Surface is really more of a PC with 'tablet-like' functionality. The reality is that iPad seems to be caught in-between the iPhone 7+ and MacBook Air within Apple's product line...
    This

    a lot of what I do I don't need a full laptop for, but iOS is so crippled when it comes to actual productivity work that I can't really consider it. If all you're doing is consuming, then staying in the mac ecosystem isn't as important. I wish Apple would update iOS to be more than just a smart phone OS scaled up for a tablet. 
  • Reply 13 of 29
    brucemcbrucemc Posts: 1,527member
    ...
    In comments during an investor conference call on Tuesday, CFO Luca Maestri said sales were higher than expected, noting iPad captured 85 percent of the market for tablets costing more than $200. The company's earnings release further touted satisfaction and business adoption in a subsequent conference call.
    This comment is actually the most interesting info. I would have easily believed 85% of say over $400 or $500, but over $200??!!  So there really isn't a tablet market - just an iPad market - with a low end video / game device and toy market. 
    tallest skilradarthekatwatto_cobraRayz2016dedgeckonetmagecalialbegarc
  • Reply 14 of 29
    flaneurflaneur Posts: 4,509member
    brucemc said:
    Considering that the Mini 4 was over 1 year without model update, and Air 2 is 2 years, with the high end 12.9" Pro over a year - 13M units actually seems quite good.  Sort of against the odds.  I guess that is why mgmt said they expected lower. 

    Not it sure why Apple didn't update the line in at least the SoC, screens, camera. I am hoping it is because they want to move the iPads back to the spring, to even out the year some more (people can't buy everything in the holiday quarter. 
    Most likely, I think, is that they've been waiting for new components to hit scale production — the new processor and the new 10.5"display.

    A 10.5" Pro could take the platform through a completely new adoption cycle, so different and spectacular will the display performance be, if Roger's pixel calculations are correct.

    Naturally, the refresh of the entire line would be waiting for this new Pro to be ready and stockpiled. Except for the Mini, maybe, which is already at a high plateau of development.
    edited February 2017 cali
  • Reply 15 of 29

    I have the 12.9" Pro and my wife has the 9.7" one. These things are rock-solid.

    Given my itch to buy Apple products regularly, I'll probably end up buying a new iPad whenever it is available. However it may be at least 2-3 generations before my wife will replace hers. These things are built to last like regular computers.

    I expect the replacement cycle will be very similar to Macs. It is no surprise that Mac sales this quarter exceeded iPad sales. There was a new Mac released. I expect iPad sales to be slightly higher in the quarter that they release a new model. But on across a year, I'd expect Mac and iPad sales to be somewhat similar.

    The iPad Pros have support for the Pencil and they have the smart connector. I expect these to be used quite a lot moving forward. There may not be another direct input mode in the near future. That is why, IMHO, the Pro models currently are as future-proof as the new MBPs.

    watto_cobranetmagecali
  • Reply 16 of 29
    No new models released last fall and no software changes. If iPad doesn't get some software love this year these numbers will continue to decline at at least in the consumer space. iPad's problem is not hardware it's software. But my fear is Apple doesn't recognize that because enterprise sales are still strong. But most likely enterprises are using custom apps and using the device as a general purpose computer. Give me a file system and drag and drop for split screen and I'd be very happy, I know some want windowing and cursor but to me that's perhaps a step to far and starting to turn it into a Mac.
    cali
  • Reply 17 of 29
    appexappex Posts: 687member
    Apple should make a true Mac tablet with Intel x86 inside, USB ports, visible file system, etc.
  • Reply 18 of 29
    For God's sake, revitalize the Mac lineup, introduce something truly differentiating for the iPhone and make the iPad more versatile (more MacOS -like). At some point, it would be great to have one AppleOS for all devices.
    If you're suggesting a single identical OS for all devices, terrible idea. I don't even know how you could mouse on a Watch. but if you mean a common source OS with different metaphors and interfaces, congrats -- we already have that as they're all derived from OS X. 
    edited February 2017 netmage
  • Reply 19 of 29
    k2kw said:
    For God's sake, revitalize the Mac lineup, introduce something truly differentiating for the iPhone and make the iPad more versatile (more MacOS -like). At some point, it would be great to have one AppleOS for all devices.
    They added a keyboard with the smart connector to the iPad Pro.  They needed to add mouse support too.   They already support one pointing device - the pencil.   That and make it easier to print.   Then for a lot more people it could be a laptop replacement.

    I bought one printer that was supposed to be an AirPrint printer for my dad but could set it up on his old network because he doesn't have a Mac or PC.   Are there any printers that will just work with AirPrint?
    My HP color laser jet all in one works fine with AirPrint. 
  • Reply 20 of 29

    appex said:
    Apple should make a true Mac tablet with Intel x86 inside, USB ports, visible file system, etc.
    Why? what value would we get out of such device that we don't with a macbook?
    netmage
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