Skip to comments.CITI: The iPad Business Is Collapsing
Posted on 02/12/2013 7:41:50 AM PST by SeekAndFind
The strength of Apple's iPad business is collapsing as lower priced, smaller tablets eat into sales, says Citi's Apple analysts in a new note this morning.
The 9.7-inch iPad's unit sales were only up 1.8% on a year-over-year basis in the fourth quarter, says Citi, citing IDC data. In developed markets like the U.S. and Japan, unit sales were actually down quite a bit.
The bigger iPad is being replaced by Apple's iPad Mini, as well as the 7-inch tablets sold by Samsung and Amazon. According to IDC, Apple has 38.8% of the tablet market, which is industry leading, but is down from its peak of 56.8% in the second quarter of last year. Amazon has 15.5% of the market, and Samsung has 13.1% of the market.
As the smaller tablets take share, the average selling price of a tablet is going to fall. We saw this last quarter for Apple as the average selling price for the iPad was $467 compared to $535 the quarter before.
As the selling price collapses, Apple's profits are going to fall. And therefore, Apple's spectacular revenue and EPS growth of the last few years are going to slow down considerably.
(Excerpt) Read more at businessinsider.com ...
The mini iPad has a higher margin than the large iPad.
When you can get lightweight notebooks with larger screens and solid state hard drives for hundreds less than an IPAD or even a miniIPAD...yeah the IPAD business will become luke warm.
Are iPads made in China?
If so, who cares?
BRING BACK US JOBS.
While my preference is to go with non-Apple products, I have a concern about updates. Apple has be great with updating their operating systems and getting those updates pushed out to their products. Google also updates Android, but Android cell and tablet makers have NOT been good about getting those updates out.
Most computer users are simply content consumers. A full blown computer is a waste for them to carry around, and cumbersome for them to use.
Apple has managed to create a new consumer segment, and provide them with the product that best meets their needs.
Creating an email or scheduling a meeting does not require a computer/notebook.
Saturation is not collapsing. Everything has a limit of how many people are willing to buy.
Just another “Apple doom and gloom” article... it’s a cottage industry. Meanwhile, Apple takes record profits home nearly every quarter.
Of course Apple loses “market share” as the field commoditizes. Apple’s business model is to engage only in the top end of the category, and not to go after commodity-level sales. This keeps their margins and profits high, because they’re selling enough units at a high enough profit to make more money than competitors, even in cases (like mobile phones, for example) where competitors might sell more units.
Yes, the collapse is strictly from Apple’s point of view.
Most of us see competition and thus better quality at cheaper prices as a good thing.
My experience having owned an iPhone, iPad, and a Macbook Pro is that Apple does provide these things, but they invariably link the use of these things through their iTunes platform or quicktime or other such proprietary-based usage that makes dealing with moving things on and off the device, playing, using, storing etc. problematic.
Maybe, but notebooks are less convenient to carry about, which is where the tablets fill a niche.
I don’t personally view tablets as productive machines, as much as they are multimedia machines. It’s more enjoyable to read from a tablet than a notebook, or watch a movie, or play a game of some kind.
apple’s business model always seems to devolve into “cool to have” not actual function.
Snob appeal does not work on the business which simply needs comodity equiptment that works reliably with the need of some IT staffer trying to figure out how to link data PRIVATLY and securly with the regular computers.
“We saw this last quarter for Apple as the average selling price for the iPad was $467 compared to $535 the quarter before.”
Oh boy, the CPI just took another drop....see, no inflation at all.
Yep, tablets are used mainly for game playing, web surfing, email and book reading. No real need to pay a premium for anything other than a crisp display.
Is there a program that can convert flash content so you can move it to an iTunes account and then download it?
Apple’s mission was to implement and scale the internal mental world of Steve Jobs, an extraordinary visionary and executive.
Without him, Apple will go the way of Polaroid.
One aspect of Mr. Jobs’ visionary portfolio (Pixar) will live on at Disney, which is the vision of a man who was IMHO essentially his soulmate, although from a different generation.
Yes but the notebooks that can double as tablets have caught my eye. I hope to purchase on of those note books where the screen can separate from the base making it function as a tablet. I haven’t counted out Microsoft’s “Surface” tech just yet. Windows 8 is a bit of a chore without a touch screen but I find it’s performance with apps that I used under windows 7 much more efficient and smooth. It’s very fast with a Icore 5 quad core, 16 gigs of ddr3, and a solid state boot drive(I run and install the apps from the hard disc terabyte drives and store my data on them. There are apps that will restore the old start screens and get rid of that “metro” look. I just go to the “desktop” on windows 8 and work from there anyway!
My current note book is an asus Icore 7 with 8 gigabytes and it is 3.0 lbs...very light weight. I don’t have 8 on it but I might just give it a spin to seen how the note book would perform with a solid state drive (that I would have to add)
iPple has been a hyped marketer of low spec but cosmetically attractive devices for decades.
Even before their marketing genius died recently, they had reached a point where they knew that they literally could not hold their place in the market without pulling stunts like...claiming sole ownership of the rounded rectangle shape (you know the shape - every soap bar shares it and most tables) for pbones and tablets.
That is a business model that has reached the end of its rope, and the only defenders they have left are drinking some serious Koolade.
Somebody wants Apple stock to drop some more (probably to grab a bunch on “sale” for when investors figure out the analysts were wrong and the price jumps back up).
Seriously - total iPad sales have not diminished. Is the mini cutting into the “full-size” ipad sales? Some - but it has also opened up more consumers as buyers with the lower price and for some, more compact/convenient size.
Yes, Samsung, Amazon (and others) are offering competition - in some cases, serious competition. Yet to get comparable features/screen, the price-points are not so far apart. I know some folks with fairly deep pockets who started with iPad, went to iPad 2, bought either a Kindle Fire or Galaxy Tab - and returned to the iPad.
The tablet market is still expanding. The key is - continued growth for Apple overall.
Of course, the analyst also completely covers over the fact that Apple had a record quarter - the very quarter the analyst is pointing to as signs of trouble - record profits, record sales...
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