2013 iLife for iOS (three up, iPad Air)

In announcing financial results for the March 2014 quarter, Apple surprised analysts by reporting basically flat iPad growth.

Compared to the same quarter in 2013, sales of the Apple tablet hit the 16.35 million unit mark versus analyst consensus of 19.7 million units. More worryingly, it’s a 16 percent annual drop from the 19.5 million iPads moved in the year-ago quarter.

Slowing growth is the new normal rather than an anomaly because the tablet market as a whole has seen little innovation lately, cautions Morgan Stanley analyst Katy Huberty…

She wrote in a note to clients, via Business Insider:

We lower our 2014 tablet growth forecast to 12 percent from 26 percent on the back of increasing penetration rates and the lack of new, differentiated products.

Although slower tablet growth should help PC demand, our global PC model remains largely unchanged at -5 percent in 2014 and 2015.

She claims suppliers attribute this slowdown to two key factors: increased penetration rates – as in, most people who wanted a tablet already have one – and lack of meaningful innovation.

Although Android “appears to be faring better than iOS tablets” due to their lower prices and broader product portfolios, suppliers are now counting on seeing growth coming from larger-screened tablets further cannibalizing traditional notebooks.

While this does not bode well for Apple, it’s perfectly understandable that the tablet market just can’t be as competitive as the smartphone market.

Though smartphones have become commoditized, ubiquitous and indispensable, that sector continues to experience a double-digit growth and here’s why

Firstly, one does not need to fork out a couple hundred bucks to get a smartphone because most carriers, especially those in the United States, subsidize smartphones so you could get a decent handset with no upfront payment whatsoever.

Compare this to tablets, which are largely sold unsubsidized and therefore cost more upfront. Secondly, a tablet isn’t something an average person necessarily depends on, as opposed to a smartphone.

Thirdly, I can certainly sympathize with the ‘lack of meaningful innovation’ argument. For those who own an iPad 3 or iPad 4, the iPad Air – despite its dramatically thinner and lighter appearance – just isn’t a substantial enough upgrade to justify the purchase.

And lastly, upgrade cycles for tablets are longer than a typical two-year upgrade path for smartphones.

Anyway, I want to hear what you think about the flat iPad growth.

Can the next iPad revitalize growth of the sector, do you think?

Should Apple be concerned about tablet flat sales? And if so, does the firm need an even cheaper tablet than its lowest-price $299 iPad mini to revert the trend?

  • Virus

    Most people probably got the older model iPads and there’s really no point upgraded unless you got ipad1or2

  • n0ahcruz3

    Its flat because theres a category called phablets. Ever since phablets came out ipad or tablets in general declined or remained flat in sales/growth. What do u think is the reason apple is gonna release a bigger iphone 4.7″ and later 5.5″? Heres my prediction they will release larger iphones discontinue ipad mini release a 12″ ipad along with the 10″ ipad. Just my 2 cents

    • Rowan09

      Not true because people usually own at least 2 smart device and a 5″ screen cannot compare to a 7″ or greater screen. People don’t see a reason to upgrade to a new iPad every year, just like I wouldn’t upgrade my PC every year. It’s normal to see flat sales especially when it’s being compared to a market that really didn’t exist a few years ago.

      • n0ahcruz3

        If i had a 5.5″ iphone i dont see the reason to buy a 7″ tablet.

      • Rowan09

        The Note 3 is 5.5 but it’s not a tablet since it’s too small. I understand what you’re saying though.

      • 5.7″ 😎

      • Rowan09

        Oh correction 5.7.

  • Dan

    Makes sense. I’ve got an iPad air and don’t plan to upgrade for the next year or two.

    • Rowan09

      I still have the 3rd gen and until something happens to it or a new one comes out that forces me to get it, I’m not upgrading.

      • James Gunaca

        Exactly. If iPad Air had Touch ID then it would have been worth it from an iPad 3 (which is what I have). Other than that it’s just slimmer and slightly faster.

      • ✪ aidan harris ✪

        I think it’s an understatement to call the iPad Air ‘slightly faster’ than the iPad 3. My iPad 3 has become extremely sluggish since upgrading (should I call it downgrading?) to iOS 7. I think this can likely be summed up by the animations though and the iPads lack of memory. If iOS 8 didn’t have iPad 3 support or the new iPad had Touch ID it would be an immediate buy from me…

      • Why do you want a finger print scanner on a iPad? I understand on a phone but on a semi-non-mobile device that you leave at home (majority anyway). I can see it being used on a mini as it’s so portable but not the full size. But I’d rather have some features as we lack so many others

      • ✪ aidan harris ✪

        I want one due to the ease of use and increased security. The fingerprint sensor works really well recognising my fingerprint more a less instantly. It’s not a killer feature yet it’s something that’d likely cause an impulse buy 😉

      • Having it for the app store could definetly be nice. Then I could put an even harder password for my Apple ID. Not sure if I trust the technology enough. Once your finger print gets compermised youre kinda screwed. But its probably not very likely to happen. But I dont trust NSA

      • Dan

        I used to think that the scanner was a gimick, but I use it everyday. I used to be weary about having my wife play with my phone, now I can lock the apps I prefer to be ‘private’. Also it’s way easier to unlock the phone compared to typing in a password.

      • Kurt

        I think it’s a great feature. Not needed on the iPad for me since no one uses it but me and it’s always at home. But for an phone or small tablet I think it’s useful. I like the idea of locking apps. I don’t like how you have your mail and social media apps open for anyone to use.

      • James Gunaca

        I guess “slightly faster” is somewhat understating it, but the iPad 3 can still run just fine on iOS 7, albeit a little laggy; as expected with 2 year old hardware.

        I’m thinking iOS 8 won’t support the iPad 3 so I’ll be upgrading to whatever new iPad comes next esp. if it has Touch ID!

  • James Gunaca

    If iPad Air had Touch ID I would have bought one. Apple’s loss.

  • Dante Arellano

    Ipad stuck in the past can’t make looks amazing same thing

  • Sounds like the “Post-PC Era” is coming to an end…oh wait, it never started.

  • Josh

    No need upgrade my ipad every year.waste of money.

  • Benjamin J Schwartz

    sales are flat because people don’t replace tablets and computers as frequently as they replace phones.

  • blastingbigairs

    My iPad 3 does the job just fine. That’s the beauty of Apple products, you can run them in to the ground and they remain relevant and useful until that day comes. My 2009 iMac still runs circles around most brand new PC’s. I do tend to upgrade my iPhones a bit more often though.