In 2016 Q1, the iPad accounted for nearly 22% of the total tablet shipments worldwide. Samsung, with less than 15% market share, was a fairly distant second. However, the picture is not rosy at all, when sales figures in absolute terms are considered. In the last quarter, Apple shipped approximately 9.9 million units of iPads. This is the weakest sale figure for the iPad since 2011. Compared to the first quarter of 2015, iPad sales have dropped off by an alarming 20%, and we here take a look at the probable causes behind the recent struggles of Apple’s iPad:
- Global tablet market nearing maturity – When the first iPad model was released in 2010, it was a one-of-its-kind gadget, something that effectively kickstarted the tablet market. Sales soared to 72 million units by 2013. Three years on, and mobile app developers and analysts feel that this market is nearing maturity, and iPad sales are stagnating as a result. The growth rate of global tablet shipments has been falling steadily since 2014. The downward sales trend of iPad is a direct consequence of that.
- Cannibalization by the ‘larger’ iPhones – It’s a classic case of the dog-eats-dog story. Apple’s own line of phablets is gradually eating into the sales of the iPad. A buyer who already owns the 5.5” iPhone 6 Plus has little or no interest in buying an iPad. The availability of Apple phablets at subsidized rates has brought down the price differences between the latest iPhones and iPads too. In terms of both style and utility, phablets are slowly replacing tablets – and iPad is losing out.
- Lack of interest among buyers – The novelty factor about the iPad when it first came out has well and truly worn off. Reports from online iOS app development forums confirm that the interest levels of buyers in the new iPad models are falling steadily. The general consensus is that, unlike the PC or the smartphone, the iPad is not an ‘essential device’ (in a recent Huffington Post survey, less than 5% respondents listed the iPad as ‘essential’). It’s no longer new, it’s no longer perceived as something terribly useful, and as a result, the iPad has become more of a niche product.
- Features in the new iPads seem dated – The multi-user support and split-screen multitasking feature in iOS 9 made a lot of news. However, the fact remains that Android tablets (4.2 Jellybean and later) have had the multi-user mode for quite some time now. The split-screen feature is not something revolutionary either. The 9.7” and 12.9” iPad Pro models are all sleek and fast – but their functionalities do not make them good enough substitutes of laptops. Apple has been playing the catch-up game in the tablet market for years, and that is hurting.
- Much longer upgrade cycle – Compared to the iPhone, people are a lot less interested in upgrading their iPads on a regular basis. A late-2015 study showed that iPad 2 remains the most shipped Apple tablet (with 20% market share), with iPad Mini taking up the second spot. On the other hand, the combined sales of the newer iPad models hovered around the 15% mark. This clearly indicates that people prefer having the ‘cheaper’ versions of the iPad, and the upgrade cycle of the iPad is very slow. After the spurt in sales in the first few years, things have come to a relative standstill now.
- Lack of room in the developed markets – In the United States, nearly 45% people own at least one tablet. With Apple being the market leader, it is only natural that most of these tablets are actually iPads. This, in turn, means that the penetration of the iPad in the US is already very high, leaving little scope for further growth. The scenario is the same in many other developed countries. The market is close to saturation, and iPad sales have hit a roadblock.
- iPad is a ‘shared device’ – This is also an important factor. The iPhone or the Apple Watch are personal smart devices, but the iPad is more of a shared gadget. Multiple users (e.g., family members) typically use the same iPad for various purposes. Each individual does not need to have a separate iPad, while everyone obviously has to have their own smartphones. Not surprisingly, iPad sales have never even come close to matching iPhone sales (which, incidentally, also declined in the first half of 2016).
- Lack of enough marketing thrust – Yes, there was extensive coverage when the iPad Pro and the Apple Pencil launched in November 2015. In general though, new iPads are not marketed by Apple as vigorously as, say, the flagship iPhones, or the Apple Watch, or even the latest iterations of the iOS platform. People are already losing interest in the iPad, and the half-hearted marketing is not helping.
- Positioning of the Apple brand – The iPhone 5C (which was a relative failure, anyway) aside, Apple has always positioned its devices as premium products. With the developed markets getting clogged, there is an opportunity to enter the developing markets in a big way – but here, Apple is losing the war against lower-priced Android tablets. Most people from these countries either cannot afford, or are not willing to, shell out $500+ for a new iPad, when cheaper, ‘similar’ alternatives are available. According to many experts from the field of Apple app development, the absence of the Apple brand in the lower end of the market is putting iPads at a disadvantage.
Note: iPads, unlike iPhones, do not come with any carrier contracts. This allows people to use their iPads for as long as they want, before even considering a replacement. This makes the upgrade cycle of iPads even slower.
10. That thing about apps – Third-party iOS app developers typically create applications for the iPhone. These apps and games may or may not have versions optimised for the iPad and the iPod Touch. However, things are never the other way round – where an app has been created exclusively for the iPad. In the grand scheme of the struggles of Apple iPad, this is a minor factor – but the absence of really popular iPad-only apps have complicated matters more.
11. Struggles in the education sector – Traditionally, iPads have had a strong role to play in education technology. Teachers in developed countries have confirmed that the iPad (with pre-installed kids’ apps) are ideal learning gadgets for children. However, the Apple tablet is having to cope with stiff competition here too – particularly in the form of Google Chromebooks. In a study conducted earlier this year, it was seen that kids were much likely to accidentally damage iPads than the less expensive Chromebooks. There is also a tendency among children to use iPads for other, non-educational purposes (gaming, for instance). Schools have, as a result, started to hand out Chromebooks to students instead of free iPads.
12. Is the Macbook a better deal? – Recent trends have indicated that as well. The 12” Macbook Air models are sleek, lightweight and have practically all the features that the latest iPads can boast off. The price difference on the storage (GB) basis between MacBook Air and iPad is not huge either. Although not to the extent of the phablets, the smaller Macbooks are also eating into the sales of iPads. The trend of replacing older iPads with Macbooks is also picking up momentum.
A common complaint against Apple’s iPad was the absence of a 32GB model at the entry level – an issue that the Cupertino company resolved with the 9.7” iPad Pro last year. However, sales have not picked up as anticipated. With iPads making up more than 10% of the company’s stock price, the poor sale figures is certainly alarming. While Apple is not likely to announce wholesale price cuts anytime soon, it will be interesting to see how it tries to revive the flagging fortunes of the once-popular iPad.
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