EC1 Capital

Apple iPad Growth is Sluggish, but not Hopeless

Can selling to businesses revive iPad sales?
Jay Jay Wed 29th Oct 2014 17:46

Apple reported that Ipad sales were 12.3 million in the quarter, down from 14.1 million in the same quarter last year. These rather underwhelming sales figures have already had people prematurely bidding farewell to the iPad.


Why are iPad sales faltering?

Maturation (not saturation) of the tablet market

The iPad has passed its honeymoon period of blockbusters sales.  Instead, now Apple finds itself in a more mature market, in which many people already have their first tablet. 

To compound this, the iPad’s replacement cycle is much longer than a mobile phone’s (hence why iPhone sales have remained more robust).  People more frequently receive contractual upgrades from mobile carriers on their phone every couple of years.  Secondly, because the iPad is not as frequently used as the iPhone, it is likely that people are less concerned about having the newest, most powerful model.  

Fierce competition

Apple is also facing increasing competition from a hoard of new rivals offering a fairly similar product at far more palatable prices.  Tesco’s Hudl, Amazon’s Kindle Fire and Samsung’s Galaxy Tab (to name only a few) are offering a wide range of tablets to suite different uses.  Although Apple is the largest tablet vendor, Android is the predominant table OS – featuring on over 60% of tablets.


Can selling to businesses revive the iPad’s fortunes?

Apple (and indeed other tablet manufacturers) has only scratched the surface of selling to businesses.  Tablets are already being used extensively across numerous industries including healthcare, education and construction. As legacy enterprise software gets replaced by modern applications, the demand for tablets will increase.

What enterprises need is power.  Businesses need super tablets that have a large enough screen, a powerful processor and an adequate keyboard and multitasking capability.  Apple is already preparing a new 12.9 inch iPad for release in early 2015. In July the company also forged a partnership with IBM to develop industry-specific mobile applications.  IBM is also planning to sell iPads to its corporate clients.

Apple CEO Tim Cook has (publicly) appeared unperturbed by sluggish iPad growth - mentioning that there are high levels of customer satisfaction and usage.   So it’s probably not worth writing the iPad off too soon as the one thing we can count on is Apple’s ability to surprise and delight with new products.


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