80% of reduced iPad shipments attributable to channel inventory decline
Apple drew down its iPad channel inventory by 1.9 million units during the June quarter, accounting for the lion's share of the year-over-year decrease the company saw in iPad shipments.
iPad shipments were down for the first time ever in the June quarter, sliding 14 percent to 14.6 million units. The numbers are partially attributable to the fact that Apple launched a third-generation iPad in March of 2012, while no iPad update has yet to arrive in 2013.
"We had just announced the third-generation iPad, which was our first iPad with a Retina display," Apple Chief Executive Tim Cook said. "We had announced it in March, and so that was our first full quarter."
But in addition to a tough comparison from 2012, Apple has also been working to draw down its channel inventory, Cook revealed on Tuesday. Specifically, he said iPad inventory was drawn down by 1.9 million units during the quarter.
That reduction in channel inventory accounted for 80 percent of the 2.4 million less iPads Apple sold this year, Cook noted. He also highlighted stats that show the iPad accounting for a whopping 84 percent of Web traffic from tablets.
"If there are lots of other tablets selling, I don't know what they'e being used for," Cook said. "Because that's a pretty basic function, is Web browsing."
iPad sales to education also saw record highs in the June quarter. And Cook noted that both the iPhone and iPad are finding considerable success in the enterprise.
The CEO said he's not fazed by the drop in iPad sales, characterizing himself as "really happy" with the tablet's performance in June, and stating the year over year drop "was not a surprise to us."
iPad shipments were down for the first time ever in the June quarter, sliding 14 percent to 14.6 million units. The numbers are partially attributable to the fact that Apple launched a third-generation iPad in March of 2012, while no iPad update has yet to arrive in 2013.
"We had just announced the third-generation iPad, which was our first iPad with a Retina display," Apple Chief Executive Tim Cook said. "We had announced it in March, and so that was our first full quarter."
But in addition to a tough comparison from 2012, Apple has also been working to draw down its channel inventory, Cook revealed on Tuesday. Specifically, he said iPad inventory was drawn down by 1.9 million units during the quarter.
That reduction in channel inventory accounted for 80 percent of the 2.4 million less iPads Apple sold this year, Cook noted. He also highlighted stats that show the iPad accounting for a whopping 84 percent of Web traffic from tablets.
"If there are lots of other tablets selling, I don't know what they'e being used for," Cook said. "Because that's a pretty basic function, is Web browsing."
iPad sales to education also saw record highs in the June quarter. And Cook noted that both the iPhone and iPad are finding considerable success in the enterprise.
The CEO said he's not fazed by the drop in iPad sales, characterizing himself as "really happy" with the tablet's performance in June, and stating the year over year drop "was not a surprise to us."
Comments
So the mini did compensate
What drove down the stock from its high in the AH is they hint that launches will happen in October instead of september. imo that doesnt meant we wont have something lauching before, but it does confirms there will be something in october.
Forgot about the whole no new iPad in March thing, too.
Quote:
Originally Posted by herbapou
Makes senses, a few months after the ipad 3 launches it was normal to have lots of units in the channel. Now we are a few months away from refreshes, so inventory is low.
So the mini did compensate
What drove down the stock from its high in the AH is they hint that launches will happen in October instead of september. imo that doesnt meant we wont have something lauching before, but it does confirms there will be something in october.
What comment indicated October?
Quote:
Originally Posted by tzeshan
One reason is old iPads still work very well. Unlike iPhone, iPad users do not feel the need to upgrade.
I'm guessing most growth is due to hand-me-downs; me iPad 2 works great, but I'll get a new one soon, and pass my iPad 2 to a family member.
iPads for everyone.
This is why iOS doesn't support multiple users.
No, you're a worthless subhuman wretch who has no right to talk about any product unless you own the newest model.
Sorry, lapsed into "complete idiot" there for a second.
Quote:
Originally Posted by Pendergast
What comment indicated October?
CFO mention it
Anyway, this seems like a new iPad is on the way.
Quote:
Originally Posted by Rogifan
Cook and Oppenheimer mentioned October but that was in reference to the next time they would be able to disclose things to analysts. In other words, we're not discussing new stuff until the next earnings call which is in October.
You're sure? How often do they discuss new products in earnings calls?
Quote:
Originally Posted by Tallest Skil
No, you're a worthless subhuman wretch who has no right to talk about any product unless you own the newest model.
Sorry, lapsed into "complete idiot" there for a second.
I have reported you.
Quote:
Originally Posted by Rogifan
Cook and Oppenheimer mentioned October but that was in reference to the next time they would be able to disclose things to analysts. In other words, we're not discussing new stuff until the next earnings call which is in October.
oh, this could still mean we get launches in september indeed. I need to find is exact words
Update: yep, he actually said it will be done in october, so september is where the launches will take place. CNBC had this one wrong, they told launches would not happen until october.
Quote:
Originally Posted by tzeshan
One reason is old iPads still work very well. Unlike iPhone, iPad users do not feel the need to upgrade.
The first gen iPads won't run iOS 6, but the iPad 2's a still great, it's just more for the budget conscious market that doesn't need Retina displays. I'm sure a bunch of schools buy them.
Quote:
Originally Posted by joebloggs
The iPad 3 launch last year makes total sense for lower sales this year. But I question whether drawing down inventory had anything to do with it. I thought Apple counted actual sales to consumers, not stock entering the pipeline. That has been a distinction often made - that many of the droid makers count a product as "sold" as soon as Best Buy places an order. Unless Apple is now doing the same, drawing down channel inventory wouldn't have any effect on numbers sold.
I think Apple has always count units in the channel as sold units. I know fans here are always saying Apple numbers are sold units, but hey, fanbois will be fanbois. Most the of number is sold units and units in transit indeed, but its never 100% sold units.
The people who made that distinction were idiots.
Apple reports sales to channel and sales to customer - i.e. online sales from the Apple store. Mostly to channel.
Quote:
Originally Posted by joebloggs
The iPad 3 launch last year makes total sense for lower sales this year. But I question whether drawing down inventory had anything to do with it. I thought Apple counted actual sales to consumers, not stock entering the pipeline. That has been a distinction often made - that many of the droid makers count a product as "sold" as soon as Best Buy places an order. Unless Apple is now doing the same, drawing down channel inventory wouldn't have any effect on numbers sold.
You're right the consensus here has always been Apple only reports sales to customers. Not retailers....
Quote:
Originally Posted by geekdad
You're right the consensus here has always been Apple only reports sales to customers. Not retailers....
There has always been a minority group of us repeatedly explaining that Apple reports shipments and not sales. We have repeatedly stated that the shipped v. sales argument was moot. But we were bashed, stomped and ridiculed as Android fans.