iPad slump shows tablet sales in poor health

1 May 20151 Share

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Broken tablet, via Shutterstock

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Tablet sales worldwide continued their painful decline in Q1 of this year, with it coming as little surprise when you see the downward spiral that iPads are on.

In a weird schism, Apple’s incredible profitability of the past three years has come at a time when its iPads – devices that captured the world’s attention at the start of the decade – have become somewhat irrelevant.

In the company’s most recent financial results posted earlier this week, it showed that sales of the products dropped by a little under a quarter in a year. Not just that, but they’re not that profitable in comparison to Apple’s other products.

For example it made roughly the same (US$5.4bn) from selling 4.5m Macs as it did from selling 12.6m iPads (US$5.6bn).

iPad falling fast

Overall tablet sales dropped less than 6pc in Q1 2015, meaning the iPad fall-off is far outstripping the industry’s average.

“The market slowdown that we witnessed last quarter is continuing to impact the tablet segment, but we see some growth areas that are starting to materialise,” said IDC’s Jean Philippe Bouchard.

“Cellular-enabled tablets are outgrowing the rest of the market, providing an additional revenue stream for OEMs and mobile operators. In addition to driving higher usage than Wi-Fi-only tablets, cellular-enabled tablets also help position the segment as true mobile solutions rather than stay-at-home devices.”

Tim Cook, Apple’s CEO, hasn’t given up on the iPad, feeling it’s just finding its true level after an incredibly successful opening year.

“It is what it is. It will play out, and at some point it will stabilise. I am not sure precisely when, but I’m pretty confident it will,” he said.

Yesterday the company announced an innovative new partnership with IBM to send up to five million of the devices to Japan for the elderly to use. Clearly, the Cupertino giant isn’t giving up the ghost just yet.

Samsung playing second fiddle to Apple

Samsung is the second-biggest operator but it also declined 16.5pc in the quarter – both Apple and Samsung combined represent more than half the entire market.

Interestingly, Lenovo is one of the few tablet vendors that continues to grow in a declining market. The company’s wide range of products – including plenty of low-cost offerings – are proving popular in a growing number of regions and it is a brand that performs well in the adjacent PC and smartphone markets.

Asus saw significant losses, but LG’s re-entrance into the tablet sphere saw it perform very well, coming in at 3pc of the whole industry.

Of course the obvious reason for why iPad sales suffered so much in the last few months is the dawn of the iPhone 6 Plus, which is far larger than any previous models and offers users an incredibly advanced alternative to the tablet.

Apple is known for cannibalising some of its offerings to the benefit of the rest. iPods are vanishing, thanks to the capabilities of iPhones. And, when the Apple Watch figures start rolling in, we could see yet more ‘ancient’ devices lose their sheen.

Broken tablet image, via Shutterstock

Gordon Hunt is senior communications and context executive at NDRC. He previously worked as a journalist with Silicon Republic.

editorial@siliconrepublic.com