There have been a few famous tablets over the years. Moses brought a few down from Mt. Sinai you may have heard of, for example. I’d like to talk about one that is a little more current–specifically the iPad, introduced by Apple in 2010.
At the time one of the most amazing things about the iPad was not its relatively svelte design, power or display but its price–$500 was seen as a veritable bargain for a piece of Apple hardware. People were impressed, the iPad sold millions, the improved iPad 2 sold millions and everyone was happy ever after.
Until Apple’s 3rd quarter (Apr-Jun) of 2013, when year over year sales of the iPad declined for the first time. Sales remained flat for awhile but starting in the 2nd quarter (Jan-Mar) of 2014, sales of the iPad have declined year over year for every quarter–seven quarters in a row so far.
Reasons for the declines have been attributed to various factors but the main ones people cite are:
- Cheaper alternatives, mainly in the Android tablet market and in the forked version Amazon uses for their tablets
- Longer upgrade cycles; people upgrade phones every two years, tablets get upgraded more like computers, so some may hang onto their iPads for 3-4 years before feeling a need to update
- The rise of larger smartphones has eaten away some of the tablet market
- The rise of smaller, lighter ultrabook laptops has likewise eaten into the tablet market
- Hybrid devices like Microsoft’s Surface Pro 4 have lured away some people who wanted something more powerful than an iPad
- The iPad hasn’t changed fundamentally since its introduction over five years ago. Compare the original iPhone and its capabilities to the current iPhone 6s and the difference is fairly dramatic
The reason I decided to write this is because I think Apple’s iPad strategy is muddled right now and what they are doing is unlikely to reverse the declining sales (it should be noted that in Q4 2015 Apple sold 9.88 million iPads–the lowest number since Q3 2011–but that’s still an awful lot of iPads, so it’s not going away anytime soon, regardless).
Let’s see how Apple is addressing the above factors.
- Cheaper alternatives. Apple is never going to produce a bargain-priced tablet. Apple doesn’t do bargain-priced anything and that’s okay, no one expects them to. But they had to do something to bring pricing down and their solution has been to retain a selection of previous generation models at lower price points. Hence you can get the current iPad Air 2 for $499 or the previous generation iPad Air for $399. This is probably the best Apple can do here. They are never going to compete against Amazon’s $50 tablet-soon-to-be-in-a-cereal-box approach.
- Longer upgrade cycles. This is something Apple has no real control over. It affects all tablets, so it’s not a problem specific to Apple. Would dramatically different iPads spur people to upgrade sooner? It’s possible but it’s just as likely it could push people into keeping what they have if the new version deviates too much from what they expect an iPad to do.
- Larger smartphones. Apple has chosen to go the route of cannibalization here by introducing the iPhone 6 and 6 Plus in 2014 with larger 4.7″ and 5.5″ displays. While they’d prefer people buying an iPad and an iPhone, having them buy a larger iPhone is better than having someone eliminating both and getting a big screen Android phone instead.
- Smaller, lighter laptops. Apple is again going with cannibalization by introducing the MacBook, a 12″ laptop that weighs less than two pounds, comes with a single USB-C port and is available in three different colors–just like an iPad! Price-wise it’s in an entirely different market but design-wise it’s definitely the first step by Apple toward making a laptop that is as light and portable as a tablet.
- Hybrid devices. Apple executives like to make fun of products until they decide to do their own take on a particular device a few years later. Such is the case with the iPad Pro and its optional keyboard and stylus. Apple’s take on a Surface Pro-style device is more iPad and less laptop than the Surface but it’s clear Apple is trying to pull away sales from Microsoft’s hybrid while also attempting to expand the iPad’s reach.
- The 2015 iPads all do the same things the original did in 2010, they just do it faster while weighing less and looking better. This is one area where Apple does not appear to have a plan–or has yet to reveal it.
Looking over the list, Apple is clearly doing some things to address problems with declining iPad sales, even if some of those–like the introduction of larger iPhones–help the company more than they do the iPad itself. The reason I stated that Apple’s iPad strategy seems muddled is tied directly to its current iPad lineup and how it’s evolved over the last year.
In 2013 Apple introduced the iPad Air. The next year they brought out the iPad Air 2, a faster, thinner, lighter model. This year Apple did not update the Air–the primary iPad model–at all. They refreshed the iPad mini by replacing last year’s embarrassing iPad 3, which only added Touch ID–something Apple apparently thought people would be happy to shell out an extra $100 for–with the iPad mini 4. They also introduced the iPad Pro, the really big iPad. They retained the iPad Air and iPad mini 2 as “budget” alternatives.
The mini sells well but it doesn’t sell as well as the 9.7″ model. One could argue that its sales may decline even more as larger phones encroach on its space–a 5.5″ display is closer to a 7.9″ display than 9.7″, after all (Apple doesn’t break out sales per iPad model but industry fancypants generally agree the 9.7″ model is the main seller). The iPad Pro, while still fundamentally an iPad, is so much larger and more expensive that it is likely to draw people looking for its unique qualities rather than as a general tablet. Someone who just wants a good, solid iPad still has the iPad Air 2 and despite it being a year old, it is still a fine tablet. But by not updating its main model, Apple seems to be saying it doesn’t know what to do with it. They can probably make it faster, maybe a little thinner (they are hitting limits in this area) but is that enough to woo people to upgrade? It doesn’t look like it, but at the same time no update at all makes the iPad Air 2 feel a bit forgotten and again, it’s their primary iPad.
Will the improved mini 4 turn sales around? It’s unlikely, though the improvements are welcome.
The iPad Pro is still a bit if a mystery in how it will play out but I think its high price will keep it from breaking out and becoming a huge seller. And people considering a Surface Pro are probably still more likely to get a Surface Pro, if only to overcome the limits of iOS that the iPad Pro still has to contend with (some would argue–as I would–that Windows 10 is a better operating system for productivity than iOS 9).
Rumors are circulating that Apple will reveal its next revision of the Apple Watch at a March 2016 event–about three months away as I write this– and the event may also reveal the follow-up to the iPad Air 2. If this turns out to be accurate, it will be interesting to see what the next iPad will look like and if the delay in updating it is due to product drift and uncertainty or because Apple is poised to bring some truly new features to the iPad.
Having an iPad Air myself, I admit I wouldn’t mind the lighter Air 2 but given the differences between the two models, I can’t justify the expense of upgrading. I’m curious to see if Apple can talk me into parting with my money in 2016.
