Apple iPad sales slumped 18% in Q1, but Cook still sees 'bright future' for platform

Posted:
in iPad edited February 2015
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."
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Comments

  • Reply 1 of 78

    No surprise. The iPhone 6 Plus will continue to steal sales from iPad. Focus on the next generation Apple TV.

  • Reply 2 of 78

    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.

  • Reply 3 of 78
    bdkennedy1bdkennedy1 Posts: 1,459member
    People don't need a new iPad every 2 years.
  • Reply 4 of 78
    rogifanrogifan Posts: 10,669member
    Tim said there could be cannibalization coming from the Mac. Either Apple doesn't care or they've got stuff in the pipeline to make iPad more attractive. The only reason I bought the Air 2 is because of 2GB RAM which should have been in the first Air.
  • Reply 5 of 78
    netroxnetrox Posts: 818member
    iPad works well and is blazing fast, - I don't think peopl eneed new iPads that soon.
  • Reply 6 of 78
    stubbstubb Posts: 15member

    Apple iPad sales down? Clearly Apple is dying.

  • Reply 7 of 78
    lilgto64lilgto64 Posts: 1,147member

    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. 

  • Reply 8 of 78
    gtrgtr Posts: 3,231member
    Maybe a Start button will help sales?
  • Reply 9 of 78
    Quote:

    Originally Posted by GTR View Post



    Maybe a Start button will help sales?

     

    ... and offer it in brown.

  • Reply 10 of 78
    bageljoeybageljoey Posts: 1,763member
    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.
    I disagree. The data shows that Joe and Jane are seeing a reason to buy. Half to almost 3/4 of iPad purchasers are new to iPads in Apple's most important markets. This is clearly stated in the article and it is not insignificant.
    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.
  • Reply 11 of 78
    The iPad may have a different adoption rate than initially expected, and it may have a different adoption rate then the products it replaces.

    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.
  • Reply 12 of 78
    calicali Posts: 3,495member
    bluefire1 wrote: »
    No surprise. The iPhone 6 Plus will continue to steal sales from iPad. Focus on the next generation Apple TV.

    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!!
  • Reply 13 of 78
    bageljoey wrote: »
    I disagree. The data shows that Joe and Jane are seeing a reason to buy. Half to almost 3/4 of iPad purchasers are new to iPads in Apple's most important markets. This is clearly stated in the article and it is not insignificant.
    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.

    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.
  • Reply 14 of 78
    pazuzupazuzu Posts: 1,728member

    Amazon Fire HDs are eating Apples lunch? Mayday is a game changer-plus so less expensive for what most use tablets for. 

  • Reply 15 of 78
    sflocalsflocal Posts: 4,744member
    $9 Billion in revenue is still something the competitors would kill to have RIGHT NOW! The a$$hat analysts make it sound like the iPad is at a dead end, which it clearly is not.

    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.
  • Reply 16 of 78
    hentaiboyhentaiboy Posts: 1,029member
    Quote:

    Originally Posted by bdkennedy1 View Post



    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.

  • Reply 17 of 78
    slurpyslurpy Posts: 5,187member

    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. 

  • Reply 18 of 78
    jungmarkjungmark Posts: 6,718member
    cali wrote: »
    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!!

    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.
  • Reply 19 of 78
    Put a kickstand on it /s
  • Reply 20 of 78
    bdkennedy1 wrote: »
    People don't need a new iPad every 2 years.

    Every four years should do it.
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