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...
I agree- bring back US Jobs. But that won’t happen so long as it is cost-wise and regulatory-wise prohibitive.
As much as the Cult of Apple irritates me, an increase in sales, even if it’s “only 1.8%” is not exactly a state of “collapsing.”
“which is the vision of a man who was IMHO essentially his soulmate, although from a different generation.”
Jobs’ claim to fame was creating devices that dumbed down the experience of using technology while making the person using it feel smart.
Disney was an adult who never forgot how to play, and he showed the world you didn’t have to stop playing, or dreaming, or that there was little difference between the two.
Disney remained an adult his entire life, and the core values he installed at Disney enabled the company to withstand 20 years of Michael Eisner.
The means each man took to achieve their visions couldn’t have been more different.
They were both visionary. I think the comparison ends about there.
Jobs never came up with any of the stories at Pixar, he just helped create the systems required to apply factor-scale automation to the animation business.
And here’s the bottom line: What happens when you have $169B in the bank and nothing left in the pipeline?
You give it back to the investors. It’s when you know the party is over.
They’ll die a gilded death like Microsoft, unless MS can make their investments in quantum computing pay off.
Job’s genius was making ordinary people do extraordinary things. Tim Cook isn’t Steve Jobs, or Wozniak, for that matter.
RE: As much as the Cult of Apple irritates me
So, who do people hate more now — Apple or Microsoft?
Enter the iWatch, etc.
Apple still has something special to offer over the Android competitors: tighter hardware/software integration, a bit more simplicity, greater stability, and above all, greater security. Some of the anti-virus companies are offering Android products, if that tells you anything. Apple has tight control over the contents of their store and what can be installed on their products.
When I decided to buy a smart phone, I did a LOT of reading and then “kicked the tires” for hours at the local retail store before settling for the iPhone 4S. I had initially been inclined to go with Android, because as a Linux user, I prefer open source instead of proprietary systems. I certainly don’t like the iTunes interface. In spite of all that, I finally concluded that the iPhone and iOS were the best bet. A year later, I still have no regrets. I will always sacrifice some glitz and pizzazz for a solid product.
He isn't Roy Disney either. Roy wasn't Walt, but he appreciated him and tried to figure out how to emulate him.
A committee can't be a visionary.
A committee of eight half-Jobses won't even equal a one tenth of a Jobs.
I guess sometimes a partnership can (I'm thinking here of Bill Hewlett and Dave Packard, or Robert Noyce and Gordon Moore) because technical excellence is (in some ways) orthogonal to business and managerial excellence.
The next Steve Jobs is out there, but he doesn't look anything like Steve Jobs.
That "tight integration" was the direct result of strong leadership that was pursuing an integrated vision, coherent at over a wide range of abstractness.
The strong leader was Jobs, who - when he heard a proposal or saw a new technology - knew instinctively whether it would or would not "work" within his framework.
I owned a second generation iPod Touch. Apple supported it for two years with updates.
I now own 2 Kindle Fires. First and second generation. I have received updates for both.
“Apple has tight control over the contents of their store and what can be installed on their products.”
I’ve bought and replaced 2x as much apple gear as I have for myself, in presents and gifts for family.
“The tablet market is still expanding. The key is - continued growth for Apple overall.”
Indeed, the tablet market is expanding, everywhere except Apple. Apple has decided (perhaps rightly), that it’s customers are not interested in full scale machines that can do whatever you ask of it, preferring the ‘managed experience’, so that the majority of users can meet the majority of their needs, all while charging a premium. It’s a good business plan.
Can I browse FR on that? :-)
Most people who bought the first-generation iPads are still very happy with them....there’s really no need to upgrade, who is going to use them for a camera anyway?
The next game changer will come from improved battery life....give me a device that I won’t have to constantly charge...now that would add some serious value.
Can I browse FR on that? :-)
BTW, when they WERE $249, that was two months rent for most people. Might have even gotten you a fairly decent used car.
The way I see it is, apple has to keep coming up with something revolutionary every two years, as it did under jobs. Can it?
I love my ipad. However, the newer tablets have keyboards in their free covers as well as touch screens. They have USB ports! If apple doesn’t eclipse these tablets soon with a whole new dimension, they they will have to add these functions and they will be FOLLOWING, not leading.
We will see.
Silly article. OMG the iPad is going down!!!! OMG the iPad mini is soaring
Any tablets with FULL size USB (A) ports?
Not the mini or micro USB.
Thanks in advance!
With the marxists regimes taking over the mindshare in this Country....
You must be kidding that a sane businessman would move stuff back here.
The mini-pad market has been saturated for years.
Jobs claim to fame was creating devices that dumbed down the experience of using technology while making the person using it feel smart.
What next? Disposable mini-pads?
Am I reading something incorrectly? Apple’s tablet (read iPad) sales grew - yes?
Okay, give me a timeline of something revolutionary every 2 years. I think it was a lot more spaced out than that, and that this kind of hyper-expectation is what's causing a lot of the "DOOMED, DOOMED I TELL YOU" Apple articles. (That, and contrarian writers who have to take the minority view on everything.)
BY my count, Apple had the iPod in 2001, the iPhone in 2007, and the iPad in 2010. That's an average of 4.5 years between "revolutions". Am I missing one in there?
Even Apple, who is bringing a small amount of manufacturing jobs back to the US is, I suspect, only doing it as a PR move to eventually get the political favors it needs to return foreign profits to the US without being punitively taxed on it.
I think this may be a case where everybody who wanted one bought one already.
They’re way past 100 million.
By the "rules" of FR, they're both taboo.
Apple of course is run by a gay guy.
And Microsoft domos were "all in" on the Wash State gay marriage campaign.
It's LINUX or nothing, LOL.
Yes, but not very much, and especially not when compared with their rivals.
Apple’s prices are just too high for what they offer. You can get comparable equipment for about half the price.
Hmmm... closest competitor is the Samsung Galaxy Note 10.1
Galaxy Note 32GB from Amazon.com = $549.99
Apple iPad “Retina Display” 32GB = $599 (has significantly better screen)
Apple iPad 16GB WiFi+3G, similar screen resolution, slightly slower processor = $399.
Galaxy Tab 2 (7”) 8GB memory = $199
Apple iPad Mini 16GB = $329 (slightly higher resolution and larger screen, twice the memory).
Still not the “half the price” claim.
Disclaimer: Opinions posted on Free Republic are those of the individual posters and do not necessarily represent the opinion of Free Republic or its management. All materials posted herein are protected by copyright law and the exemption for fair use of copyrighted works.