Apple iPad Encounters 'Speed Bump'

Posted by Kirhat | Sunday, March 29, 2015 | | 0 comments »

iPad Tablet
While everyone in Apple are still celebrating the launch of Apple Watch last 9 March 2015, Apple iPad may be encountering some issues that will have a big impact in its future.

According to a recent report from the International Data Corporation (IDC), shipments of Apple's tablets are expected to decline over the next five years, while tablets powered by Microsoft's Windows operating system more than triple in popularity.

Apple's CEO, Tim Cook, has described the iPad's current problems as a "speed bump." iPad sales have been in decline for more than a year - down 18 percent on an annual basis just last quarter - but Cook believes, over the "long arc of time," the iPad will recover and sales will blossom.

IDC disagrees. In 2014, Apple shipped 63.4 million tablets - 27.6 percent of the market. IDC believes this figure will contract to 60.1 million this year, before recovering somewhat, but believes Apple will ship only 61.9 million tablets in 2019, giving it a theoretical market share of just 23 percent.

If IDC's projections prove accurate, Apple will sharply underperform the tablet market. Over the next five years, IDC expects tablet shipments to grow more than 17 percent - but believes Apple's tablet shipments will decline by about 2 percent.

Apple can certainly survive without the iPad -- its profits have climbed to record highs even as the iPad has struggled -- but it may need the tablet for reasons of diversification. With so much of its revenue coming from just one product (iPhone), any disruption in the smartphone market could take a significant toll on Apple's earnings.

In contrast, IDC is quite bullish on Windows tablets. The research firm believes Microsoft's next operating system, Windows 10, will prove to be a boon for the platform, and juice sales of Windows tablets in the quarters to come.

IDC does not believe that Windows tablets will crush the iPad - in fact, it still expects the iPad to outsell all Windows-powered tablets by a healthy margin in 2019 -- but believes that Windows tablets will strongly outperform the broader tablet market in the years ahead. Last year, Windows-powered tablets accounted for 5.1% of the market -- 11.6 million shipments in total. IDC believes this number will surge by nearly 230% to 38 million in 2019.

That would be fantastic for Microsoft, whose Windows business has come under pressure as sales of traditional PCs remain depressed. It has seen a modest level of success with its Surface Pro 3, but Microsoft is basically a non-factor when it comes to tablets - 15 percent market share would at least represent a solid base.

IDC is a global provider of market intelligence, advisory services, and events for the information technology, telecommunications, and consumer technology markets. They have more than 1,100 analysts worldwide and offers global, regional, and local expertise on technology and industry opportunities and trends in over 110 countries.


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