Does the iPad have a future?

iPad fans and iPad haters have one thing in common: They aren't buying a whole lot of iPads at the moment.

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Rob Schultz

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There’s a lot of iPad talk these days, but it’s not the blue-sky, post-PC-world talk that we heard back in 2010 when the iPad premiered. These days, it’s more of a gray-sky, tablets-are-a-failure kind of chatter. iPad sales have slumped as smartphone sales continue to surge. Does the iPad have a future?

Tim Cook thinks so. Apple’s CEO continues to be bullish on the iPad, even though he has to acknowledge that sales are down. Cook likes to point out that the iPad is used far more than any other tablet, and that customer satisfaction is high. It’s just that sales aren’t going up, they’re going down.

Slumping sales

Take a look at this chart, which smooths out seasonality (Apple sells lots of iPads during the holiday season) by averaging the previous four quarters of sales. It’s clear that the iPad hit a high-water mark in late 2012 and early 2013, and since then sales just keep going down.

ipad average sales

Or consider this chart, which smooths out seasonality in a different way, by comparing the current quarter to the same quarter the previous year. The story’s largely the same: A high point in early 2013 and since then, smaller iPad-related revenues for Apple in eight of the last nine quarters.

ipad yoy revenue growth

So the iPad sales boom is gone. (Though to put it in perspective, Apple still sold nearly 11 million iPads last quarter, which generated $4.5 billion in revenue.) Still, if you listen to analysts like Above Avalon’s Neil Cybart, the iPad is basically toast.

Cybart’s view is that the tablet market can’t compete with smartphones (especially today’s much larger-screened models) or with laptops, and is therefore between a rock and a hard place. Worse, he suggests that an analysis of tablet market share shows that most tablets being bought worldwide are cheap no-name brand tablets being used as video players.

Cybart thinks that by introducing a larger “iPad Plus” model—a development that’s been rumored for some time now—Apple will create a product that’s more insulated against the weaknesses of the overall tablet market, because it’s a device that’s more likely to be used for productivity.

I’m a little skeptical of Cybart’s reliance on worldwide tablet market share numbers to damn the iPad, though. Apple’s not attempting to compete with no-name tablets that you can buy for $150 to watch videos on. It doesn’t want to be in that space, but if one were to believe that watching videos is all that tablets are really good for, I can see why you’d be so bearish on them.

I can’t agree, however. My house is littered with technology, owing to my own profession as well as predilection, and yet three of the four family members are avid users of iPads day to day. Maybe we’re outliers, but I don’t buy it: I think we are exactly Apple’s audience for the iPad.

Happy customers

Since the iPad came into our lives, my wife and I have used our laptops much less. When I’m not in my office or out of the house entirely, you’ll find my iPad very close to me. I use to read and answer email, chat in Slack groups, use Twitter and Facebook, read articles on the Web, and yes, watch videos. I even write articles on it from time to time.

I don’t believe that the iPad is a product without a purpose because it’s too functional and expensive for most potential tablet users. Nor do I believe that the existence of a mega-iPad is necessarily Apple’s bulwark against the tribulations of the tablet market.

No, I think we’re all down on the iPad because we got too excited about it to begin with, and the hangover hasn’t faded yet.

Just the other day I was reading this incredibly long article about the potential human colonization of Mars for my new podcast about space stuff. And I was struck by one of the article’s charts, which depicts the world’s enthusiasm about space over time:

space excitement graph

During the space race and the moon landings we were all just so excited about space! It’s been hard to live up to that, even though one could argue that the interest is building over time, as we send probes past other planets (and Pluto!) and drive rovers around on the surface of Mars.

That chart just seems so iPad to me. We all built it up to be the next wave of technology, sweeping the PC away into ancillary, truck-like roles and leaving us in a shiny new touch-based future. And who knows, we may yet get there. But it’s not what we thought it would be.

There are a few reasons for this. First, lots of people bought iPads (and other tablets) in that initial burst of excitement, and then found out they didn’t use them. That’s got to be the case. How many people bought that first iPad or some other, more disappointing tablet (I’m looking at you, first-generation Kindle Fire) and realized it just wasn’t all that? This product category, which seemed like it was potentially for everyone, isn’t.

Then there’s the longevity thing. This is where Tim Cook is holding out hope right now, and I think I’m inclined to agree: Over time, the people who love and use their iPads will replace them. But these are not smartphones that get swapped every two years. Tablets have a longer lifespan, like a PC, and so many people bought them during those first couple of years that we’re going to have to wait to see them buy replacements. When that happens, the sales figures will show it—but it won’t look anything like that initial peak of enthusiasm.

The mystery of the tablet market is, how many of the initial tablet buyers were the first case—full of regret and unlikely to ever buy one again—and how many were the second case. I am not an analyst and I haven’t done any research. All I can say is that, I love my iPad and I know a whole lot of other people who do, too. My gut feeling is that there is a very nice market for the product—one quite a bit larger than the Mac market—and eventually we’ll see that. But all I’ve got is a gut feeling.

Apple’s answer

In the meantime, Cook and Apple seem to be trying everything they can to restart the iPad’s momentum. The much-ballyhooed partnership with IBM is all about iPads. Apple keeps pushing in education and other markets, too. And of course, iOS 9 will bring a bunch of productivity features that should make the iPad a much more flexible tool for getting work done.

(I suspect the iPad’s initial sales were so good that Apple was fooled into thinking it didn’t need to improve the iPad—which is a mistake that the company may be paying for now. But Apple sure seems to be paying attention to it now!)

I don’t think the iPad or the tablet market in general are going to fade out, nor do I think the rumored iPad Pro will solve the iPad’s problems. The real story is going to be more complicated, and take time. Still, the numbers don’t lie: The iPad’s not what we thought it was going to be in the heady days of late 2012. Maybe we should all get over our disappointment about that and start imagining where it might go next.

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