Analysts at Barclays Equity Research noted that sales of Apple Inc. (NASDAQ:AAPL) iPad devices are weakening based on its third quarter financial results this year. During the period the tech giant sold 14.6 million iPads, a decline of 14% year-over-year and 25% quarter-over-quarter.
Barclays Equity Research analysts Ben Reitzes, Ryan Jones, and Mathew Markezin-Press commented that Apple Inc. (NASDAQ:AAPL) needs to ensure that the iPad maintains its market lead, given its importance as an interface while iPhone adoption is strong. The analysts pointed out that iPad sales during the quarter were significantly lower than their 18 million units estimate.
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Apple looking at placing iPads in airports, airplanes, restaurants
The analysts observed that Apple Inc. (NASDAQ:AAPL) is well rooted in consumer and creative segments, and they believe that the tech giant should start a great focus on the corporate market because it will be beneficial for the company in the future.
Reitzes, Jones, and Markezin-Press evaluated the possible enterprise adoption of the iPad in airports, airplanes, or restaurants. They believe that Apple Inc. (NASDAQ:AAPL) will be able to regain share in the enterprise steadily with the iPad, and it will refresh its focus on it by implementing innovative thinking around new uses that can drive sales, collect data analytics, and manage inventory at lower costs.
The analysts pointed out, “We believe that the ‘new applications’ market for iPads in business could top 100 million units over time- about the size of the corporate PC market- at least $40 billion in size.”
Apple iPad remains the ‘product to beat’ but also precarious top spot
The analysts spent time with Rick Blatstein, CEO of OTG Management Group, which operates all the beverage, food, news, and gift shops in terminals C&D at La Guardia Airport. They found out that the company uses 2,500 iPads to drive incremental sales. According to them, investors who will stop on those terminals and use the iPads on hand will be able to start visualizing how the device could offer better experiences, and it requires a greater push.
Reitzes, Jones, and Markezin-Press said the iPad remains a “product to beat” in enterprise tablet computing, but they warn that the situation could change if Apple Inc. (NASDAQ:AAPL) is not careful.
The analysts recommended an Overweight rating for shares of Apple Inc. (NASDAQ:AAPL) with a price target of $525. They believe that the company will continue to benefit from iPhone and iPad expansion as well as from upcoming products. They are also confident that the company remains capable in innovating and disrupting profit pools.