Apple Inc. (NASDAQ:AAPL) had a great quarter in the three months through June, but the company’s reliance on the iPhone during the period was palpable. iPad sales numbered a little over 13 million. The tablet computer is dead, according to early doomsayers, and it’s certainly a dead duck at Apple according to some. Here’s a look at why iPad sales are falling, and what’s actually going on in the tablet market.
Tablet sales are sluggish all over
IDC reckons that there was trouble in the entire tablet market in the second quarter of 2014, and that’s certainly hitting the Apple Inc. (NASDAQ:AAPL) iPad division. Their picture of the market is below.
According to the research firm there was growth in the second quarter of this year, despite what other research has suggested, but it wasn’t all plain sailing. Tablet sales were lower in the second quarter than in the first quarter of the year, and Apple Inc. (NASDAQ:AAPL) units are visibly shifting downwards while an onimous “other” group takes hold of more share.
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US Carriers killing iPad demand
Over at UBS, the feeling appears to be that Apple Inc. (NASDAQ:AAPL) is suffering from promotions set up by US wireless carriers in the tablet business. A chart accompanying the report showed exactly what the company meant:
The analysts reckon that promotions that offer money off of an iPad on contract may harming sales of the Apple Inc. (NASDAQ:AAPL) slate. Mid range tablets are free on a wireless contract, but an up front payment is needed to secure an iPad.
Apple is no longer king of the tablet world
IDC has been following the fortunes of Apple Inc. (NASDAQ:AAPL) in the tablet world, and it seems that the iPad is no longer the undisputed king of the tablet world.
Market share in a monopoly is bound to decline given proper regulation, and that’s exactly what’s happened to Apple Inc. (NASDAQ:AAPL) iPad market share in recent years. The table market is now dominated by devices selling at half the price of the iPad, and they’re winning in total number of units sold. The gap is getting bigger, and Apple appears to be losing out each quarter, not only to overall market stagnation, but also to competition from Android computers.
The tablet doesn’t make categorical sense
Samsung can be accused of a lot of unscrupulous behavior when it comes to intellectual property, but Apple Inc. (NASDAQ:AAPL) certainly didn’t invent the phablet. The oversized smartphone design was popularized by Samsung, with its original Note, and it’s hurting Apple Inc. (NASDAQ:AAPL) and changing the way it designs phones. Business Insider provided the following chart:
Smartphones with screens five inches big, or those larger, are exploding and will likely overtake those with smaller screens very soon. The iPad doesn’t make sense to many people as a web browser if their phone has a six inch screen, and so the device is cast aside. The tablet has become something to play with, a device of pure consumption. It’s no wonder that Amazon is the leader in the market.
If you can’t beat them join them
Apple Inc. (NASDAQ:AAPL) isn’t about to abandon the tablet market, but the company is not using the iPad to shore up its losses in the area. September is set to bring with it a new, much larger, iPhone 6, and the company may recoup some of the iPad sales it lost to large smartphones.
As for the iPad itself, it seems that the future is not all that bright. The device is never going to reach the heights that investors hoped, and its growth possibilities are already dead in the water, though it will fill a niche going forward.