Why Worry Over iPad Sales Slowdown Is Overblown

 
 
By Don Reisinger  |  Posted 2014-08-04 Email Print this article Print
 
 
 
 
 
 
 
 

Apple is under fire from a vocal minority that has looked at the company's most recently reported quarter and questioned whether the iPad has a future. Apple reported that it sold 13.3 million iPads in its fiscal third quarter, representing a 9 percent decline compared with the same period in 2013. The company's revenue was down in the iPad segment by 8 percent from $6.4 billion to $5.9 billion. Apple was expected to sell more iPads during the period, but didn't, causing some to wonder if the iPad's best days are behind it. Such concerns have been furthered by Best Buy, which revealed recently that tablet sales in general have been "crashing." There's also research from several well-respected analysts indicating that slates haven't been attracting as many customers as the market had expected. Tablets, some say, are on a downswing that might continue for a long time. Apple's iPad, the reasoning goes, will be the hardest hit by such a decline. The truth, however, is that all of this handwringing is overblown. Just because tablet sales have fallen for one quarter doesn't mean that buyers are permanently turning away from these mobile devices. This slide show looks as at what is really going on.

 
 
 
  • Why Worry Over iPad Sales Slowdown Is Overblown

    By Don Reisinger
    Why Worry Over iPad Sales Slowdown Is Overblown
  • One Quarter a Market Does Not Make

    Although Apple had a down quarter, it doesn't mean that things will stay that way. All of the hysteria suggesting Apple's iPad is in trouble fails to acknowledge that the iPad—and the overall tablet—market has been growing rapidly for several years. It also fails to acknowledge that Apple is still selling millions of iPads and generating billions of dollars in revenue. Comparing Apple's sales of a single quarter to its impossibly high successes of past year isn't fair. Apple is still leading in tablets and will remain so for the foreseeable future.
    One Quarter a Market Does Not Make
  • Let's Not Forget the iPad Air Is Getting a Little Old

    So why were iPad sales a little lower than anticipated? Let's not forget that the iPad Air and iPad Mini launched a year ago, making them a bit long in the tooth in the fast-changing tablet space. History has shown that late spring and summer tend to be more difficult periods for Apple as it prepares to launch new devices. Customers also know that new products are coming, so they tend to hold back on spending. All of that played into Apple's last quarter.
    Let's Not Forget the iPad Air Is Getting a Little Old
  • Apple Will Definitely Launch New iPads Soon

    Following that, is anyone really questioning whether a new iPad is launching soon? Apple is reportedly working on improvements to its iPad line, including bundling the TouchID fingerprint sensor into the products. As soon as new iPads are announced, expect sales to jump and this past quarter to be a distant memory.
    Apple Will Definitely Launch New iPads Soon
  • Apple Hasn't Fully Developed Sales in Emerging Markets

    Apple needs emerging markets to be successful over the long term. The company has made that abundantly clear in all of its earnings calls and said in its latest call that places like China will play a crucial role in boosting sales of its top products. Currently, two-thirds of the world's population is offline and therefore have little to no need for an iPad. As more of those people come online, Apple is going to find a way to get iPads into their hands.
    Apple Hasn't Fully Developed Sales in Emerging Markets
  • It's Hard Not to Believe in Apple

    When it's all said and done, it's awfully hard to count out Apple. While the company might be facing some harder times than it has in the past, it's proved time and again that it can overcome adversity and be successful. Don't count Apple out.
    It's Hard Not to Believe in Apple
  • The Enterprise Is Still Making Moves

    According to Apple, nearly all of the Fortune 500 companies are using iPads, and the company sees greater opportunities to deploy the slates across the enterprise in the coming years. The enterprise appears to be a crucial part of Apple's strategy and will boost sales in the coming quarters if everything pans out.
    The Enterprise Is Still Making Moves
  • The IBM Deal Could Mean Something Major for Apple

    Apple and IBM announced last month that they have formed a partnership to develop up to 100 apps for enterprise customers. Apple is providing 24-7 AppleCare to enterprise customers through the partnership, and IBM will sell bundled iPads with the enterprise-focused apps. That deal, the companies argue, could help both firms and ultimately get more iPads into the enterprise. If true, that would deflate all arguments that Apple is in trouble in the tablet space.
    The IBM Deal Could Mean Something Major for Apple
  • Tablet Sales Will Jump Again During the Holiday Season

    When Apple announces its holiday sales at the beginning of 2015, the company's difficult fiscal third quarter will be nothing but a distant memory. The holidays are always a major time for Apple, and if the company releases a new line of iPads this year, sales will jump. And once again, Apple will have an "up" year in the tablet space.
    Tablet Sales Will Jump Again During the Holiday Season
  • The 'Compelling' Alternatives Aren't So Compelling

    Some have said that Apple's troubles over the last quarter have been due in part to the success of other platforms. The truth, however, is that devices competing with Apple just can't keep up over the long term. Samsung is seeing its tablet sales diminish, and we're still waiting on a new Nexus. Amazon is arguably Apple's biggest competitor, but there's no telling how it will hold up against the new iPads.
    The 'Compelling' Alternatives Aren't So Compelling
  • There Are Still the Apple Intangibles to Think About

    Apple's success in the tablet space isn't due only to its ability to attract customers. The company has a fantastic AppleCare service that also attracts customers, and it has gone out of its way to make customers who buy its iPhones and Macs also want to buy its tablets—the so-called "Halo Effect." Few companies have the breadth of extended, integrated services and complementary products to help sell tablets. Apple has capitalized on that, and will continue to capitalize on it in the coming quarters.
    There Are Still the Apple Intangibles to Think About
 
 
 
 
 
Don Reisinger is a freelance technology columnist. He started writing about technology for Ziff-Davis' Gearlog.com. Since then, he has written extremely popular columns for CNET.com, Computerworld, InformationWeek, and others. He has appeared numerous times on national television to share his expertise with viewers. You can follow his every move at http://twitter.com/donreisinger.
 
 
 
 
 
 

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