In response to sliding iPad sales, investors on Wall Street have shown little interest in the market leading tablet. Apple Chief Executive Tim Cook took offense to that this week.
"Nobody is asking about iPad on the call," Cook said during his company's quarterly earnings conference call on Tuesday.
The iPad is attracting a large share of new customers to the Apple ecosystem, particularly in emerging markets.
Investors likely aren't interested in discussing the iPad because it's not driving growth for Apple: Sales of the iPad were down 20 percent year over year to 9.8 million tablets, accounting for $4.3 billion in revenue. In contrast, Mac sales reached a record 5.7 million units and $6.9 billion in revenue.
Still, Cook believes that the iPad plays a very important role in Apple's ecosystem, informing investors that the device attracts a huge number of first-time Apple customers, particularly in emerging markets.
For example, Cook said that in China, a whopping 40 percent of those who bought an iPad had never owned any Apple product before. In addition, for 68 percent of iPad buyers in China, it was their first tablet.
Apple frequently boasts about how "sticky" its platform is, with customers not only staying with the company's hardware for future upgrades, but also buying into other Apple devices like the iPhone and Mac. This is bolstered by services such as the App Store, iCloud, iTunes, Apple Music and more, which keep customers "locked in" — Â and happily so.
Apple Chief Financial Officer Luca Maestri cited statistics on Tuesday from ChangeWave that showed a 97 percent customer satisfaction rate for the iPad Air 2. In addition, corporate buyers have a 95 percent satisfaction rate with the iPad.
The iPad also dominates in terms of both purchase intent and existing usage. Maestri also cited data indicating that the iPad has a 73 percent share in the U.S. market for tablets priced above $200.
Apple will also expand its premium iPad lineup next month with the debut of the iPad Pro, and company officials said Tuesday they hope the larger 12.9-inch model will appeal to business customers. Maestri cited a potential iPad Pro use case in a new Bloomberg professional app, which will allow more than 325,000 financial professionals to gain access to market data and trading tools.
With so many iPads in use already, one possible reason for the sales decline is a longer upgrade cycle — Â customers and companies alike treat their iPad more like a PC and less like a smartphone, keeping the device for a longer period of time before opting to upgrade. It's also likely that growing Mac sales, and the popularity of larger-screened iPhones, have been cannibalizing the iPad.
None of those factors were mentioned in Tuesday's call, however. Maybe because, as Cook noted, nobody asked.
66 Comments
Welp... I'll be buying an iPad Pro to help out sales.
The reason sales aren't going up is simple... These devices work and continue to work. We still have about 2% of our app user base on iPad 1 and nearly two thirds on iPad 2. Apple continues to support iOS 9 on the latter which means people are a) satisfied with their purchase b) use it in their daily lives c) don't have a need to upgrade. I'd rather have that because it's a long term customer.
I totally agree with the Apple point of view. I started buying serious Apple hardware with my 1st generation iPad. iMacs followed, iPhones were an obvious choice Macbook Pros with Retina display were the next steps... the last of which arrived just a couple of days ago. The long upgrade cycle is another key fact: my wi-fi only iPad is still serving my kids!
The newer iPads are better, but I don't feel compelled to upgrade from my iPad 2. I don't see that as a problem for Apple. For that product, the upgrade cycle is just longer.
The reason sales aren't going up is simple... These devices work and continue to work. We still have about 2% of our app user base on iPad 1 and nearly two thirds on iPad 2. Apple continues to support iOS 9 on the latter which means people are a) satisfied with their purchase b) use it in their daily lives c) don't have a need to upgrade. I'd rather have that because it's a long term customer.
I'm one of those with an iPad 2. The Pro can't come out soon enough for me. Even though iPad 2 can run iOS 9, it doesn't do it well. Please please let the rumours be wrong and have an early November release date!!!