The following is a transcription of Apple CEO Tim Cook’s statements regarding iPad from yesterdays Q414 conference call with analysts, verbatim:
I’d take a step back on iPad. I know that there’s a lot of negative commentary in the markets on this, but I have a little different perspective on it. Here’s my simple perspective: Instead of looking at this thing each 90 days, if you back up and look at it, we’ve sold 237 million in just over four years. That’s about twice the number of iPhones that we sold over the first four years of iPhone.
If you look at the last 12 months of iPad, we sold 68 million. And FY13 we sold 71 million. So we were down, but we were down 4 percent on sell in and the sell-through was a bit better than the negative 4 percent because we took down channel inventory some. And so to me I view it as a speed bump, not a huge issue. That said, we want to grow. We don’t like negative numbers on these things.
And so looking further in the data, I know that there’s a popular view that the market is saturated, but we don’t see that. I can’t speak to other people, but I do look at our data deeply. And, in the last market research data we have is in the June quarter and let me give you some of the real data that we’ve got: If you look at our top six revenue countries, in the country that’s sold the lowest percentage of iPads to people who had never bought an iPad before, that number is 50%. And the range goes from 50% to over 70%. And so when I look at first time buyer rates in that area… that’s not a saturated market. You never have first-time buyer rates at 50% and 70%.
What you do see is that people hold onto their iPad longer than they do a phone. And because we’ve only been in this business four years, we don’t really know what the upgrade cycle will be for people. And so that’s a difficult thing to call.
What we do know is that people always respond for us doing great products and we feel really great about what we introduced last week.
We also know that the deeper the apps go in the enterprise, the more it opens up avenues in enterprise – and that’s a key part of the IBM partnership and what I think customers will get out of that, which is more important than us selling, is changing the way people work. And so I see catalysts going forward.
There are obvious cannibalization things that are occurring. I’m sure that some people looked at a Mac and an iPad and decided on a Mac. I don’t have research to demonstrate that, but I’m sure of that just looking at the numbers. And I’m fine with that, by the way. I’m sure that some people will look at an iPad and an iPhone and decide just to get an iPhone and I’m fine with that as well.
But over the long arc of time, my own judgment is that iPad has a great future. How the individual 90 day clicks work out, I don’t know, bBut I’m very bullish on where we can take iPad over time, and so we’re continuing to invest in the product pipeline. We’re continuing to invest in distribution.
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