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While Apple's iPad Remains the King of Tablets, its Spiraling downward Trend makes it clear that the Party is Over

1 Cover iPad Pro all new no home button (1)


Apple's iPad has been a problem for Apple for many years now. It's like a slow leak that will eventually sink the ship. Focused on making the iPad ever thinner seemed to be Apple's sole focus for years and that didn't do anything to motivate consumers to try the iPad beyond its early base.


Unlike iPhones, the trend is showing that there really isn't an upgrade cycle for iPads. It would also seem that one-time iPad owners are jumping ship to focus on buying expensive iPhones with larger displays. Some may also have decided that competing tablets at half the price are as good as the iPad when simply using it as an electronic newspaper.


Even with the knife falling, Apple remains positive about the iPad and presses on to make their case for the device. At roughly the 43:28 mark of Apple's latest keynote, Cook noted that "what you might not know is we've sold more iPads in the last year than the entire notebook lineup of all the biggest notebook manufacturers."


2 ipad outsells notebooks

To clarify, that's iPad sales over any single PC company's notebook sales, not collectively as Cook was implying.


As someone who was a senior salesman and then head of marketing, I can appreciate Cook's smoke and mirrors chart that presented a brilliant twist to put the iPad in a great light.


However, once the smoke clears, the reality is that about a year after the death of Apple's late CEO Steve Jobs, iPad sales began to crash and have been on a painfully long downward trend as presented in Statista's latest chart below.


The man who could sell ice cubes to Eskimos was no longer at the helm at Apple to talk up the iPad and assist Jony Ive to innovate at a faster pace.  


3 x - Nov 14  tablet market share chart statista  Patently Apple report

Concurrently phablets began to offer larger and larger displays every year. The tablet market’s growth came to a screeching halt by the end of 2014, and worldwide tablet sales have been shrinking ever since.


As the chart above points out, based on IDC data, Q3 2018 marked the 16th consecutive quarter of declining tablet shipments, during which shipments dropped by 35 percent from 55.7 million in Q3 2014 to 36.4 million units in Q3 2018.


Yet to be fair, Statista's own 2012 iPad chart (below) contradicts their current chart's data for 2012.


4 Statista_Global_tablet_shipments_since_Q2_2010

The IDC chart (below) for Q2 2012 actually showed that Apple had a banner Q2 over the previous year with year-over-yearr growth of 84%.



Flashing back to today, Apple's latest iPad event delivered some really exceptional overall improvement for the iPad Pro and the MacBook Air that should translate to a nice sales bump for those products over the holiday quarter – and just maybe turn the iPad's negative trend positive for a quarter or two.  


Yet for the majority of consumers who aren't artists, the Apple Pencil still doesn't add any value for them yet. That may change in the future but for now it's not a winning feature.


If Apple could figure out a way to get the Smart Keyboard or Folio to offer a built in trackpad or provide mouse support, consumers in general and Apple fans specifically might be more willing to make the leap to the iPad Pro from the MacBook permanent.


Most consumers and students barely have the budget for a smartphone and one computer. Most Apple fans are used to MacBooks and until Apple can accommodate their work habits instead of forcing them to reinvent how they work, MacBooks will remain the preferred computer. Apple wins either way of course, but the iPad suffers from not growing on paper the way Apple wants to see it.


In the end, Apple remains he king of tablets with pressure building against them every year since the last quarter of 2014. In Q2 2012, Apple had 68% market share in tablets and their latest 2018 iPad stats show Apple has sharply shrunken to 26.6% market share.


Microsoft's partners have been pushing harder into hybrid tablets with Windows 10 and full keyboards that are slowly catching on.


In 2019 5G hybrids will offer always on connectivity like smartphones which could be another weapon to erode Apple's tablet lead even further. Especially if any of the leaders decide to add telephony into these hybrid devices. If that becomes a reality, then most wouldn't need to own two expensive devices but rather one. That could be another ding against the iPad.


Looking out a little further, the emerging foldable smartphone will offer screen sizes closer to an iPad Mini when unfolded and erode the pure tablet market.


Could there be a killer app down the road to reignite iPad's growth? It's a long shot and Apple knows it. So in that light it's understandable why Apple will no longer report on iPad, iPhone and Mac units going forward. The once revolutionary iPad has been on a spiraling downward trend for years and it's unlikely to have a happy ending.


It's not a doomsday scenario as the iPad will likely remain a key Apple product for years to come. It's just that the knife is still falling and no one knows where the bottom for iPad is. What is clear is that it's just never going to be a growth story again unless Apple can somehow pull off another "Reinvention" story that's tangible.  


For now however, what is tangible is Apple's CEO deciding to change the Apple story and bet the farm on services.


If you've been following Apple's financial conference calls carefully over the last year or two, then you know that Tim Cook has been playing up services quarter in and quarter out. You could check out this report covering Apple's Tim Cook playing up services big time.


Cook knew that the iPhone/iPad revolution had run it's growth story course and needed something to fill the coming void to keep Wall Street from freaking out.


How will Apple differentiate their "services" from Netflix Disney, AT&T and others to make it a winner? That's a story for another day.   


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