For more than two years, nobody can deny that Apple's iPad absolutely dominated the tablet space. As of mid-2012, Apple still claimed nearly 70 percent of the tablet market, while Android tablet manufacturers were struggling to make any headway.
Furthermore, the iPad Mini's 2012 arrival was an open secret by then. As a result, tablet market analysts expected Apple to further solidify its dominance of the tablet market over time. Unfortunately, for the company, the trend appears to go the other way.
Not only has Apple's market share lead crumbled, but iPad sales growth has also come to a crashing halt. Tablet rivals such as Amazon.com and Samsung are gaining momentum by closing the quality gap, with Apple and offering lower price points. Unless Apple can deliver vastly improved iPads later this year, the iPad's growth days are over.
It's hard to imagine right now, but just two years ago, Apple was growing iPad revenue by more than 60 percent and iPad unit sales by 80 percent – even without an entry in the growing 7- and 8-inch tablet market!In 2013, despite the addition of the iPad Mini, unit sales growth slowed to 22 percent.
Furthermore, Apple introduced the iPad Mini at a lower price point to combat cheap tablets from Amazon.com and other vendors. This led to a sharp drop in the average iPad selling price. As a result, iPad revenue grew only 3 percent in FY 2013. While iPad production costs are falling, it's safe to say that with iPad unit sales growth outpacing revenue growth 22 percent to 3 percent, iPad margins dropped dramatically.
iPad revenue growth did tick up to 7 percent last fall on a 14 percent increase in unit sales. However, that may prove to be Apple's best quarter of the new fiscal year. Demand appears to have fallen off a cliff after the holiday season.
As of 28 December 2013 – the last day of Apple's fiscal Q1 – the iPad Air and iPad Mini Retina combined to account for 8.6 percent of all iPad usage, according to Fiksu. By the last day of Q2, usage for the new iPads had grown to 14.1 percent of the total, a 5.5 percentage point increase.
Considering that Apple benefited from "channel fill" in Q1 – selling the new iPads to build up inventory at third-party retailers – iPad unit sales could easily have fallen 40 percent sequentially this quarter. That would entail a significant step backward from Apple's 19.5 million iPad sales in Q2 last year, when Apple was meeting pent-up demand for the original iPad Mini.
Furthermore, the iPad Mini's 2012 arrival was an open secret by then. As a result, tablet market analysts expected Apple to further solidify its dominance of the tablet market over time. Unfortunately, for the company, the trend appears to go the other way.
Not only has Apple's market share lead crumbled, but iPad sales growth has also come to a crashing halt. Tablet rivals such as Amazon.com and Samsung are gaining momentum by closing the quality gap, with Apple and offering lower price points. Unless Apple can deliver vastly improved iPads later this year, the iPad's growth days are over.
It's hard to imagine right now, but just two years ago, Apple was growing iPad revenue by more than 60 percent and iPad unit sales by 80 percent – even without an entry in the growing 7- and 8-inch tablet market!In 2013, despite the addition of the iPad Mini, unit sales growth slowed to 22 percent.
Furthermore, Apple introduced the iPad Mini at a lower price point to combat cheap tablets from Amazon.com and other vendors. This led to a sharp drop in the average iPad selling price. As a result, iPad revenue grew only 3 percent in FY 2013. While iPad production costs are falling, it's safe to say that with iPad unit sales growth outpacing revenue growth 22 percent to 3 percent, iPad margins dropped dramatically.
iPad revenue growth did tick up to 7 percent last fall on a 14 percent increase in unit sales. However, that may prove to be Apple's best quarter of the new fiscal year. Demand appears to have fallen off a cliff after the holiday season.
As of 28 December 2013 – the last day of Apple's fiscal Q1 – the iPad Air and iPad Mini Retina combined to account for 8.6 percent of all iPad usage, according to Fiksu. By the last day of Q2, usage for the new iPads had grown to 14.1 percent of the total, a 5.5 percentage point increase.
Considering that Apple benefited from "channel fill" in Q1 – selling the new iPads to build up inventory at third-party retailers – iPad unit sales could easily have fallen 40 percent sequentially this quarter. That would entail a significant step backward from Apple's 19.5 million iPad sales in Q2 last year, when Apple was meeting pent-up demand for the original iPad Mini.
Posts
0 comments
Post a Comment