“Apple Inc’s iPad is losing steam just four years after its release, but an alliance with International Business Machines Corp could rejuvenate a flagging product by entering into a largely untapped corporate market,” Christina Farr reports for Reuters. “Apple shipped 13.2 million iPads in the June quarter, 8 percent fewer than a year earlier and lagging Wall Street’s forecast for 14 million or more. Sales of the device, which accounted for 15 percent of revenue, fell short of Wall Street’s expectations for the second quarter in a row.”
“Apple helped create the tablet market in 2010 with its first iPad. But growth has plummeted from 2012, as larger phones became more popular and people delayed replacing their tablets,” Farr reports. “Chief Executive Officer Tim Cook described iPad sales as ‘very bifurcated’ – they continue to grow at 50 percent or above in emerging markets such as the Middle East and China, but in developed countries like the United States, the ‘market is weaker.'”
“Research firm IDC lowered its forecast for 2014 worldwide tablet demand growth to 12.1 percent – a fraction of the 51.8 percent expansion of 2013,” Farr reports. “‘The tablet market globally has really hit a wall,’ said Cantor Fitzgerald analyst Brian White. Another threat to iPad sales may come from within. Apple is expected to introduce a larger 5.5-inch (14.0-cm) iPhone in the fall. At those dimensions, the iPhone would begin closing in on the 7.8-inch (19.8-cm) iPad mini. ‘You have the negative impact of the larger screen iPhone and what that would do to iPad mini,’ said Piper Jaffray analyst Gene Munster. ‘You’re going to get a larger screen iPhone before you’ll get contributions from the IBM partnership.'”
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MacDailyNews Take: People aren’t “delaying” iPad purchases. iPads simply have a longer lifespan than some people expected. They are not smartphones. There is no driving need to replace them every 24 months or sooner. The length of the iPad replacement cycle is closer to a Mac’s than to an iPhone’s.