Has all the gloom-and-doom talk about the iPhone and iPad gotten you down? Are you worried Apple’s three-year-old tablet is a bit long in the tooth – especially against Samsung and other Android devices? Well, turn that frown upside down. The iPad isn’t going away. Indeed, one analyst says iPad sales are bigger than McDonald’s, Nike and many other Fortune 500 companies. In 2012, iPad sales reaped $32 billion, amounting to 60 percent of tablets sold. If the iPad was a company, it would be eleventh largest tech firm in the United States, says Bernstein’s Toni Sacconaghi.
We won’t see a repeat of that in 2013, however. No, the iPad is expected to rake in an astounding $46 billion and grow 75 percent…
As highlighted by Fortune’s Philip Elmer-DeWitt, if the iPad were on the Fortune 500, it would rank No. 98 – more profitable than McDonald’s ($27 billion), Macy’s ($26.4 billion) and Nike ($20.9 billion).
Viewed another way, Gap and Toys “R” Us together would not be as profitable as the iPad. But the next two years could be the iPad’s salad days, as the analyst warns growth will level off in 2015 by which time most consumers who want a tablet already own a device.
Although early iPad growth began at 59 percent, by 2015 it could fall to twelve percent of the market, according to the analyst. Likewise, the iPad’s average selling price could drop to just above $400 after unveiling at $556 in 2012. Relatively unchanged, however, is revenue from the iPad.
In 2015, the iPad is forecast to bring in $67 billion.
By 2016: $69 billion.
Even five years beyond its 2012 introduction, the iPad is seen as earning $68 billion. And with strong iPad sales giving the entire category a boost, no wonder NPD DisplaySearch says this will be the year the tablet overtakes the notebook.
Perhaps the reason for the iPad being such a sustained source of revenue: Apple’s relatively static gross margin. According to Sacconaghi, the iPad began with a gross margin of 33.1 percent.
By 2017, the number has only fallen slightly: 28 percent.
Can Samsung’s Galaxy 10.1 tablet maintain the gross margins the South Korean’s smartphones have enjoyed?
Can Samsung avoid the slipping sales prices over time?
Those are the questions hardware research firm iSuppli asked during a tear-down of the Samsung Galaxy Note 10.1. Maintaining a decent Average Selling Price over time will be even more important for Google and Amazon, which have introduced tablets under $200.
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