Why Apple Isn’t Worried That You Don’t Want an iPad
It’s common knowledge that the iPad, and the tablet market at large, has lost its momentum. A recent analysis has shown that the iPad’s collapse is probably worse than you think, but Apple may not be as worried about the iPad’s downturn as you’d expect it to be.
Analyst Neil Cybart at Above Avalon writes that the tablet market, which the iPad helped jumpstart five years ago, is in complete disarray. A look at quarterly iPad and tablet shipment data shows that things have gotten bad in the past few quarters, but Cybart reports that the seasonality of the tablet market makes it difficult to see the industry’s longer-term problems. He argues that a better way to understand what’s going on is to look at the year-over-year change in shipments, which reveals that the iPad and tablets in general have been on the decline for years, and but the tablet market has lost all momentum. Cybart writes:
Momentum is not on the side of iPad. Larger screen iPhones have been in the market for only 10 months. The latest Macbook, which effectively gave us a look at where the MacBook is headed, has been out for only a few months. These two products are game changers not just in their categories, but for tablet computing. It is becoming that much easier to recommend an iPhone or Macbook over an iPad.
When iPad sales first began to slow, many thought that Apple was losing to low-end Android tablets, but momentum began to slow because users weren’t upgrading their devices. The tablet’s replacement cycle is, by all accounts, longer than the iPhone’s, and Cybart reports that the iPad’s three-year upgrade cycle is still extending “and will likely go out as far as 5-6 years.”
Cybart reports that while there’s nothing wrong with a long upgrade cycle, the cause of the iPad’s long replacement cycle is troubling. The inferiority of older models, which have “slow processors, heavy form factors, and inferior screens,” doesn’t bother users. And that suggests that many of the older tablets that are still in use are being used only for basic consumption tasks like video watching and web surfing, and not for the productivity and content creation tasks for which Apple markets the iPad. The iPad has a lot of potential for many diverse use cases, some more plausible than others, but “in the face of all this potential, we are just using iPads for Netflix and YouTube.”
Not only are tablets being used primarily for basic tasks, but Cybart notes that smartphones and laptops essentially ruin their odds of being used for much more. Cybart thinks that the solution is for Apple to introduce “a new product subcategory at the high-end of the tablet market,” a new device “that is truly designed from the ground-up with content creation in mind.” He adds, “As long as the product has use cases that are sheltered from other products, Apple would be able to reposition the iPad line for a more sustainable path not just for growth, but ultimately for outright survival.”
The Verge’s Chris O’Brien, looking at Cybart’s analysis, posits that his number-crunching is solid. But O’Brien disagrees with Cybart’s position that the fact that the iPad is primarily used for YouTube and Netflix is a problem for Apple. “This view comes from the basic assumption that for a product to be successful, more of it has to be sold each quarter and each year,” O’Brien writes. “Naturally, this is how an investor or former Wall Street analyst like Cybart might view the world. But I think Apple (smartly) thinks more broadly and long-term than that, which has been one of the keys to its success. Rather than worrying about propping up a declining product, like the iPod, it follows the users (and leads them in some cases) to where they are happier and more satisfied.”
O’Brien thinks that where users are happier and more satisfied is with a Mac. While Cybart thinks that Apple should develop an iPad that’s less like the Mac or the iPhone, O’Brien thinks it’s okay that a MacBook is a better choice for many of Apple’s enterprise and education customers. He posits that no matter how many creative and productivity apps Apple and third-party developers build, they won’t make up for the fact that typing on the iPad’s virtual keyboard is slow and tiring. “It seems silly to try to contort the iPad into a form that makes it a better substitute for a superior product you already sell,” O’Brien writes.
Apple doesn’t have to give up on the iPad, but it also doesn’t have to depend solely on its tablet to appeal to customers and offer them the experiences and tools they want. Even if they aren’t upgrading their iPads, they’re still using them. So eventually, they’re likely to buy a new one — and in the meantime, Apple isn’t going to panic if the iPad’s upgrade cycle more closely mirrors that of the Mac than that of the iPhone.