Apple's Q4 iPad sales signal second quarter of resumed growth

AppleInsider · November 2, 2017 9:44PM

Apple's iPad sales were up year-over-year for a second quarter in a row during Q4, possibly suggesting that a wide-ranging refresh has paid off.

The company shipped 10.326 million units worldwide, up 11 percent from 9.267 million in Q4 2016. Revenues rose 14 percent to $4.831 million, and average selling price was up 11.4 percent to $467.85.

It's not clear what drove the improvements, but Apple released three new iPads during 2017: a $329 "budget" iPad, a refreshed 12.9-inch Pro, and a 10.5-inch model replacing the 9.7-inch Pro. 2015's Mini 4 remained on sale, starting at $399.

The new iPad Pros include upgrades like faster A10X processors and ProMotion, which enables a dynamic refresh rate up to 120 hertz.

In mid-September Apple released iOS 11, adding more desktop-like interface features to iPads including a Mac-style dock, drag-and-drop, a Files app, and easier multitasking.

Prior to the June quarter the iPad had been on a constant decline since 2013. That pattern has been blamed on various factors, such as bigger iPhones, longer upgrade cycles, and/or the absence of of any major design changes. The first two iPad Pros were released in late 2015 and early 2016, but their most important changes versus the iPad Air 2 included speed boosts, a 12.9-inch format and the Apple Pencil -- as well as higher pricetags.

One possibility is that people who skipped first-generation Pros have found cumulative improvements worth the price. The budget iPad, meanwhile, may be appealing to the educational market as well as people who mainly want a media consumption device.

arie · November 2, 2017 9:49PM

I love my new iPad Pro. I use it as my main tool these days.

melgross · November 2, 2017 10:10PM

Looking at the numbers is interesting, because last quarter, the iPad was up 15% YoY. This quarter it was up 11% YoY.

so, two thoughts. One is the hope that we aren’t seeing a short term increase, with next quarter seeing lower growth again.

two is that with the 15% last quarter, we saw a 3% increase in iPad revenue, while with 11% this quarter, we saw a substantial growth in revenue of 14%. So, last quarter’s growth was mainly led by the new 9.7” iPad, while growth this quarter was more even between that one and the iPad Pros. That is a good thing, but has me wondering if the 9.7 sales are tapering off, while Pro sales are growing.

of course, I don’t want to see the 9.7 slowing, because that’s a lot of older iPads out there to be replaced, as well as people who have none now. Though, it was pointed out in the conference call that 54% of the tablets bought in the USA, are iPads, and that 70% of those looking to buy a tablet are looking to buy iPads.

SpamSandwich · November 2, 2017 10:21PM

melgross said:

Looking at the numbers is interesting, because last quarter, the iPad was up 15% YoY. This quarter it was up 11% YoY.

so, two thoughts. One is the hope that we aren’t seeing a short term increase, with next quarter seeing lower growth again.

two is that with the 15% last quarter, we saw a 3% increase in iPad revenue, while with 11% this quarter, we saw a substantial growth in revenue of 14%. So, last quarter’s growth was mainly led by the new 9.7” iPad, while growth this quarter was more even between that one and the iPad Pros. That is a good thing, but has me wondering if the 9.7 sales are tapering off, while Pro sales are growing.

of course, I don’t want to see the 9.7 slowing, because that’s a lot of older iPads out there to be replaced, as well as people who have none now. Though, it was pointed out in the conference call that 54% of the tablets bought in the USA, are iPads, and that 70% of those looking to buy a tablet are looking to buy iPads.

My first gen iPad Pro is still THE best Apple device I've ever owned. I recommend it to everyone.

eightzero · November 2, 2017 10:26PM

Tim said on the call that the company is "firing on all cylinders." Hard to dispute it.

The product mix at this point is remarkable.

Looking forward to seeing their next thing.

emoeller · November 2, 2017 10:32PM

arie said:

I love my new iPad Pro. I use it as my main tool these days.

Ditto!

supadav03 · November 2, 2017 10:36PM

New lower cost iPad was a no brainer upgrade for my kids. They wanted ARKit & extra storage & didnt have that with their iPad Airs. Sold the Airs for $200 each and got the 2017 iPad for $299 w/ not tax. For $100 out of pocket it was an easy call. Grabbed my wife a 9.7 inch 32GB Rose Gold Pro for what amounted to $299 after selling her Air as well. Now I just need an iPad for myself.

dewme · November 2, 2017 10:40PM

arie said:

I love my new iPad Pro. I use it as my main tool these days.

I couldn't agree more. The iPad Pro 10.5" is the most responsive & immediate handheld computing device I've ever used.

tokyojimu · November 2, 2017 10:58PM

Perhaps if Apple will update certain Macs more than once every three or four years, they'll see growth there too.

socalbrian · November 2, 2017 11:06PM

tokyojimu said:

Perhaps if Apple will update certain Macs more than once every three or four years, they'll see growth there too.

I would say mac had an excellent quarter, and year. From the earning's call:
* All time record quarter for Mac sales in mainland China.
* Best year ever for the Mac. Highest annual Mac revenue in Apple's history.
* Best September quarter ever for the Mac.
* Growth of 25 percent, driven by notebook refreshes in June and a strong back-to-school season.
* Education market purchases grew double digits year over year.

jd_in_sb · November 2, 2017 11:11PM

As cliche as it sounds on this blog, I thought the iPad was doomed. Amazing to see things turn around.

sflocal · November 2, 2017 11:16PM

tokyojimu said:

Perhaps if Apple will update certain Macs more than once every three or four years, they'll see growth there too.

I think that's about to change when the iMac Pro debuts in a month, and Tim Cook did mention the Mac Pro coming in 2018 so it will be very interesting to see the pro roadmap taking off again.

midwestapplefan · November 2, 2017 11:27PM

I've wanted an iPad for years but was holding off for the right time. That time was a few weeks ago when I got a brand new iPad Pro 9.7 inch 128GB for $529 at B&H. Sure, a 10.5 would be nice, but there's no 128GB option there and 64GB is not enough. I think Apple has their produce mix wrong. My only options was the 10.5 with 256GB at $799!! or the one I got. Saving $270 is significant and in some ways the 9.7 inch is nicer. It is a bit smaller, and a bit lighter. From what I've read the difference between the two did not justify the price jump.

I purchased an iPhone 7 a month ago for the same product mix reason. A iPhone 7 with 128GB is now $649 and the iPhone 8 has no 128GB so 256GB costs $799!! Seems to be a popular price point for Apple but saving $150 was enough to tip the scale there too. Overall I have two new snappy Apple products and saved $420. I am tickled pink!

brucemc · November 2, 2017 11:28PM

melgross said:

Looking at the numbers is interesting, because last quarter, the iPad was up 15% YoY. This quarter it was up 11% YoY.

so, two thoughts. One is the hope that we aren’t seeing a short term increase, with next quarter seeing lower growth again.

two is that with the 15% last quarter, we saw a 3% increase in iPad revenue, while with 11% this quarter, we saw a substantial growth in revenue of 14%. So, last quarter’s growth was mainly led by the new 9.7” iPad, while growth this quarter was more even between that one and the iPad Pros. That is a good thing, but has me wondering if the 9.7 sales are tapering off, while Pro sales are growing.

of course, I don’t want to see the 9.7 slowing, because that’s a lot of older iPads out there to be replaced, as well as people who have none now. Though, it was pointed out in the conference call that 54% of the tablets bought in the USA, are iPads, and that 70% of those looking to buy a tablet are looking to buy iPads.

I assume that is 54% of all tablets in a market that includes extreme budget models like the $50 Fire tablets from Amazon. When you consider the price differences from an iPad ASP of $467 and likely sub $100 for everything else, that is remarkable. The last data point was something like 80+% of tablets over $200. So the iPad really has achieved iPod dominance in the US. Now it is growing that globally.

Outside de of the Surface line, which is more targeted at PC users (and enterprise), you don't here much about any other brands in this space.

melgross · November 3, 2017 12:59AM

SpamSandwich said:

melgross said:

Looking at the numbers is interesting, because last quarter, the iPad was up 15% YoY. This quarter it was up 11% YoY.

so, two thoughts. One is the hope that we aren’t seeing a short term increase, with next quarter seeing lower growth again.

two is that with the 15% last quarter, we saw a 3% increase in iPad revenue, while with 11% this quarter, we saw a substantial growth in revenue of 14%. So, last quarter’s growth was mainly led by the new 9.7” iPad, while growth this quarter was more even between that one and the iPad Pros. That is a good thing, but has me wondering if the 9.7 sales are tapering off, while Pro sales are growing.

of course, I don’t want to see the 9.7 slowing, because that’s a lot of older iPads out there to be replaced, as well as people who have none now. Though, it was pointed out in the conference call that 54% of the tablets bought in the USA, are iPads, and that 70% of those looking to buy a tablet are looking to buy iPads.

My first gen iPad Pro is still THE best Apple device I've ever owned. I recommend it to everyone.

I bought the first gen iPad with cell the day it came out. One of the very few times I stood on line for a product. When I look at it, and compare it to my iPad Pro, it’s hard to believe how far they’ve done. It’s so much bigger, and so much more powerful, but actually weighs less.

melgross · November 3, 2017 1:04AM

brucemc said:

melgross said:

Looking at the numbers is interesting, because last quarter, the iPad was up 15% YoY. This quarter it was up 11% YoY.

so, two thoughts. One is the hope that we aren’t seeing a short term increase, with next quarter seeing lower growth again.

two is that with the 15% last quarter, we saw a 3% increase in iPad revenue, while with 11% this quarter, we saw a substantial growth in revenue of 14%. So, last quarter’s growth was mainly led by the new 9.7” iPad, while growth this quarter was more even between that one and the iPad Pros. That is a good thing, but has me wondering if the 9.7 sales are tapering off, while Pro sales are growing.

of course, I don’t want to see the 9.7 slowing, because that’s a lot of older iPads out there to be replaced, as well as people who have none now. Though, it was pointed out in the conference call that 54% of the tablets bought in the USA, are iPads, and that 70% of those looking to buy a tablet are looking to buy iPads.

I assume that is 54% of all tablets in a market that includes extreme budget models like the $50 Fire tablets from Amazon. When you consider the price differences from an iPad ASP of $467 and likely sub $100 for everything else, that is remarkable. The last data point was something like 80+% of tablets over $200. So the iPad really has achieved iPod dominance in the US. Now it is growing that globally.

Outside de of the Surface line, which is more targeted at PC users (and enterprise), you don't here much about any other brands in this space.

I assume it includes the Fire. They just said the US market.

there are hardly any Surface Pros sold. Looking at the numbers, it’s not likely that Microsoft ever sold more than about 3.5 million in a year.

cutykamu · November 3, 2017 1:30AM

iPad Pro 10.5 256gb just got few months ago. It’s buttery smooth and screen is beautiful with True Tone n ProMotion. iOS 11 drag n drop is awesome n can’t believe prior to iOS 11 it was not available. Battery is awesome as always.

brucemc · November 3, 2017 2:26AM

melgross said:

brucemc said:

melgross said:

Looking at the numbers is interesting, because last quarter, the iPad was up 15% YoY. This quarter it was up 11% YoY.

so, two thoughts. One is the hope that we aren’t seeing a short term increase, with next quarter seeing lower growth again.

two is that with the 15% last quarter, we saw a 3% increase in iPad revenue, while with 11% this quarter, we saw a substantial growth in revenue of 14%. So, last quarter’s growth was mainly led by the new 9.7” iPad, while growth this quarter was more even between that one and the iPad Pros. That is a good thing, but has me wondering if the 9.7 sales are tapering off, while Pro sales are growing.

of course, I don’t want to see the 9.7 slowing, because that’s a lot of older iPads out there to be replaced, as well as people who have none now. Though, it was pointed out in the conference call that 54% of the tablets bought in the USA, are iPads, and that 70% of those looking to buy a tablet are looking to buy iPads.

I assume that is 54% of all tablets in a market that includes extreme budget models like the $50 Fire tablets from Amazon. When you consider the price differences from an iPad ASP of $467 and likely sub $100 for everything else, that is remarkable. The last data point was something like 80+% of tablets over $200. So the iPad really has achieved iPod dominance in the US. Now it is growing that globally.

Outside de of the Surface line, which is more targeted at PC users (and enterprise), you don't here much about any other brands in this space.

I assume it includes the Fire. They just said the US market.

there are hardly any Surface Pros sold. Looking at the numbers, it’s not likely that Microsoft ever sold more than about 3.5 million in a year.

Oh, I know the Surface line is only selling about 1M/quarter. My comment was just about "brand awareness".

andrewj5790 · November 3, 2017 2:44AM

tokyojimu said:

Perhaps if Apple will update certain Macs more than once every three or four years, they'll see growth there too.

Uh... did I miss something or did you miss something? There was YoY growth in Mac sales.

entropys · November 3, 2017 2:50AM

Picked up a 10.5 iPad Pro this week. This thing is an utterly incredible improvement on my old iPad 2 and iPad 4.

Thing is, until the updates this year I did not feel compelled to upgrade. I am sure there a plenty of people like me. Worthy updates drive sales. Who would have thought?

cali · November 3, 2017 7:32AM

This is where Apple pisses me off.

iPad had the strongest start in Apple history and was positioned to take over technology!
Shipping 10 million in a quarter is a joke. For it's potential 10 million shouldn't be "growth" it's depressing.

Image: https://forums.appleinsider.com/uploads/editor/6s/g8cw733eh21c.png

Image: https://forums.appleinsider.com/uploads/editor/or/65pjbqi58eml.jpg

These charts show the first quarters of iPod, iPhone and iPad sales.
iPad was clearly destined for phenomenal success

What happened?
Apple treats iPhone like the baby of the family and spoils it while throwing iPad to the back as an afterthought. No it wasn't bigger iPhones, it's the fact Apple doesn't do enough to exploit iPads strengths and even cheap outs on the hardware.
I can't believe a product that should be a high end computing device is CHEAPER than iPhone. Really shows what product is getting all the attention.

Apple could easily sell a new $999+ iPad with the most high end components and features needed with a display that large and powerful. A movie studio, an art studio, a recording studio in your backpack, exclusive features, retail push, auto push, hospital equipment, anything Apple can think up to exploit the potential iPad has lost.

iPad Pro helped a little but the truth is Apple isn't doing enough and that means consumers don't have enough reason to own one.

Apple's Q4 iPad sales signal second quarter of resumed growth

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