Apple Inc. iPad Sales To Drop Sharply In Q1 2015: KGI Analyst

Apple Inc. iPad Sales To Drop Sharply In Q1 2015: KGI Analyst

Apple Inc. (NASDAQ:AAPL) iPad sales could suffer in the March quarter of 2015, according to a report from KGI Securities by analyst Ming Chi Kuo. The KGI analyst projected that the iPhone maker would only sell around  9.8 million iPads in the first quarter of next year, which is a decline of 40% on a year over year basis.

Kuo’s theory in contrast to current trend

According to Kuo, iPad sales will drop on the back of scant new applications, tablet market saturation and a slow season. For the current holiday quarter, the analyst is expecting iPads sales to come in at 21.5 million, which would be a drop of 18% on a year over year basis.

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Kuo is a well-known analyst reporting on Apple product releases, and has a deep insight into the supply chain, which has probably influenced his forecast for the iPad in the next two quarters. If estimates from Kuo hold true, it would be a major blow to theories that the iPad was the next major business for Apple.

The Cupertino, California-based company, however, will not be affected by the decline in the iPad sales because the core product of the company is iPhone, which is selling like a hot cake. However, in the long-run this is not good news for Apple, which is striving to become a diverse company with many business lines.

Reasons for declining popularity of Apple iPad

The reason behind declining iPad sales is not one but mix of various factors. During the earnings call, Apple CEO Tim Cook said that people do not switch to the newer version of the iPads as frequently as they do for iPhones. He added that the company has been in the tablet business from past four years, and still does not know what the upgrade cycle will be. Cook also said that the potential customers could come to Apple stores and go home with Mac instead of iPad. Also, with phablet being the new trend, tablets are losing their relevance.

Kuo noted that Apple Inc. (NASDAQ:AAPL) could not trigger high demand for its new iPad Air 2, which was a significant upgrade from the previous models. He says the competition today is intense and tablet makers cannot do well with just basic features, new form factors or price cuts.

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