Jul 25, 2014

Why have iPad sales fallen so significantly in such a short time?

Apple’s recent quarterly results show that iPad sales are down almost 20% from the previous quarter. That’s a pretty big drop in sales. What’s going on? Is the tablet market saturated, or is the iPad just not as desirable as it used to be? It’s interesting that iPhone sales continue to be very robust at the same time that iPad sales are falling.


There are a few different factors that probably account for most of this decline in sales. One is that there is a significantly increased level of competition. When the iPad was released, it was really the only choice for a tablet. Now, there are very good tablets available at lower price points than the iPad. Take the Nexus 7 (which more directly competes with the iPad Mini). It is capable, has a great screen and is significantly cheaper than a comparable Apple product. You also have Microsoft’s Surface line of tablets that offer a viable option for high end and enterprise users. 


Also, tablets often get used for very specific tasks. The majority of the time I use my tablet, which is not an iPad, it is for media consumption - reading ebooks, watching Netflix or Youtube, or occasionally playing a game. My phone gets used much more throughout the day, and for a wider variety of purposes. As a result, I am much more concerned about having a phone that is powerful and up to date than a tablet that is. There haven’t been that many significant updates to the iPad recently anyway, so there is even less incentive to replace them.


Tablet also tend to be more expensive and less likely to be carrier subsidized. I don’t have the numbers, but I would guess that the majority of tablets are WiFi only. Since you don’t have two years of cellular service to pay for and subsidize the purchase price, it is a chunk of change out or your pocket all at once. 


Lastly, the iPad is competing against Chromebooks in schools. When school systems start providing tablets to students, that’s a lot of money. With a Chromebook, schools can get a product for less money that makes more sense as an educational tool. Ever tried to write a paper on a tablet? With a Chromebook, many of the everyday tasks of a student are simply easier thanks to the keyboard. If may be just as easy to consume content on a tablet, but when it comes to generating it, a larger screen and an actual keyboard win almost every time. 

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