Tis the season to dis the iPad. What’s going on exactly? How could a product that has been such a huge success, the leader of Apple’s march to the “post-PC” era, suddenly seem like week-old turkey leftovers?
Over the past few years, the iPad has steadily expanded into domains traditionally dominated by laptops. The iPad is now the primary or only computing device for a significant segment of the mobile market. More and more, people on the go are leaving their laptops at home, taking only their iPads.
With increasingly sophisticated iOS apps, such as GarageBand and the Microsoft Office suite, iPads have also been shedding their reputation as “consumption-only” devices and staking a claim as a productivity tool. As touted in Apple’s “What will your verse be” ads, iPads are finding their way into a wide variety of settings—from schools, to hospitals, to bands, to art studios, to sports training, to science labs, to cockpits, and to almost any imaginable outdoor activity. As you watched the ads, you had to acknowledge that iPads generally worked better in these settings than a MacBook would have.
The iPad mini has been an especially bright star. The original 2012 iPad mini took off strongly right out of the starting gate. It was well-timed to counter the growing popularity of smaller sized Android tablets. But it was the 2013 iPad mini with Retina display that really soared. Identical to the iPad Air except for its size, the majority of reviews touted the mini as the preferred choice. Advocates argued that the mini was more convenient to carry and easier to hold, outweighing the advantages of the Air’s larger display. Plus the mini was cheaper.
iPads, especially the mini, were on a roll and were expected to continue growing in sales and market share.
Fast forward a year
How the landscape has changed!
According to a succession of reports, there has been an overall decline in tablet sales of all brands. Most notably for Apple, the iPad experienced its first year-over-year decline.
In perhaps a more ominous sign, IDC reported that Google’s Chromebook has overtaken the iPad as the number one computer in the U.S. education market. This is especially troubling for Apple—because what students become familiar with in school often determines their purchasing preferences for the rest of their lives.
How did things sour so fast? There doesn’t seem to be one single explanation.
In education, the dominant driver appears to be price—Chromebooks are much cheaper than even the cheapest iPad. Given the typical school budget, this will often be a deciding factor. Not a tablet, but not a full-featured laptop either, educators are finding the Internet-based Chromebook to be at least good enough. To counter this, Apple might do well to come out with an ultra-cheap education-only iPad.
But there’s more to it than that. Across all markets, there’s a growing sense that the “post-PC” tablet may have been oversold. Despite all the wonderful things you can do with an iPad, there are still many times when you want a keyboard and trackpad, a larger display, more storage options, an easily accessible file system, and all the other advantages of a true laptop, such as Apple’s MacBooks. If you can afford both, great. But if you’re forced to choose one or the other, laptops appear to be re-emerging as a popular alternative.
The current decline in tablet sales may also be attributed to an upgrade cycle that is longer than initially predicted. Rather than getting a new tablet every two years—as is common with phones and as many analysts mistakenly assumed would be the pattern for tablets—people are hanging on to their iPads for at least three or four years. This obviously depresses sales once the initial sales boom is over.
Ironically, the iPad mini is seen as the biggest victim of this negative trend. Why? Because, on top of all the aforementioned factors, there’s the iPhone 6 Plus. Before the arrival of Apple’s phablet, many otherwise happy iPad mini owners grumbled about having to carry around two devices when on the go—their iPad mini and their iPhone. Many of these same users now claim that the 5.5-inch iPhone 6 Plus is sufficiently big that they can abandon their mini. Ergo, iPad mini sales go into a slump. At least that’s the logic. I haven’t seen any hard sales figures yet.
Some have gone so far as to predict that the iPad mini is (yes, that word again) doomed—they expect Apple to drop the smaller tablet from its lineup in another year or two. As a portent, they point to Apple’s decision to not update the mini this year (except for the addition of touch ID)—in contrast to the significant update of the iPad Air 2.
Whoa! Let’s not get carried away. I find such predictions to be premature to say the least.
First off, no matter what the future holds for iPad sales, I don’t see Apple acting that rashly or hurriedly. After all, it took until 2014 before Apple dropped the iPod Classic. The iPod touch continues to be available, despite apparent languishing sales. I don’t see the iPad mini disappearing at a faster rate. In fact, I don’t see the mini disappearing at all. Although its share of the market may decline, it will remain in the mix of available iPad options and continue to do more than well enough to justify its existence.
For one thing, the iPhone 6 Plus cannot adequately replace the iPad mini (and certainly not the iPad Air) for those who want a tablet as a productivity device. In most such situations, a larger display is almost a prerequisite. Such users also typically want a device that can work well with a physical keyboard. The iPhone 6 Plus does not fill the bill here.
And don’t forget that a slight decline in sales is not the same thing as low sales. As Tim Cook pointed out: “In the last 12 months, Apple sold 68 million iPads.” That’s nothing to sneeze at.
Finally, it’s difficult to argue that Apple’s decision not to update the iPad mini was due to the success of the iPhone 6 Plus—considering that the new iPhone was not even for sale at the time Apple made its decision. I suppose you could say Apple was being prescient. But Apple presumably had high expectations for the iPhone 5C; things don’t always go as Apple expects. Still, Apple’s decision does suggest that it currently sees a stronger future for the larger iPad. Consistent with this, rumors continue to swirl that Apple will expand the iPad in a still larger direction next year—with a 12-inch “iPad Pro/Plus.”
So where do we go from here? I see two trends emerging.
First, there will be an increasing split among smaller and larger iOS tablet devices. The iPad mini and the iPhone Plus will be the options for those preferring a smaller device—while the iPad Air and presumably an iPad Pro/Plus will be the choices for those who find greater value in a larger size tablet. There will be less movement back and forth, and less overlap of features, between these two categories.
Second, there will be a rebalancing of the mobile computing market. Those who predicted that tablets would eradicate laptops, or that mini-sized tablets would eradicate larger ones, were hasty in their judgments. Instead, as users become more familiar with the pros and cons of each category, a significant number of tablet users are gravitating back to a laptop. Tablet sales may continue to decline for a period of time. However, once the market stabilizes, I expect tablet sales to start a slower but significant upward trajectory again.
For many users and circumstances, the iPad remains the best choice among all of Apple’s devices. This will not change for the foreseeable future. In the mobile market, there’s room enough for iPads, iPhones, and MacBooks to all be successful. That’s what you’ll see in the months ahead. And in the end, as Tim Cook indicated at the most recent earnings call, Apple doesn’t really care what device you wind up buying, as long as the Apple logo is on it.
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