“KGI analyst Ming-Chi Kuo estimates iPad shipments will decline 40% year-over-year in Apple’s Q2, FY 2015,” Alex Cho writes for Seeking Alpha. “I believe that refresh will drive shipment growth 50% year-over-year on the assumption of a 3- or 4-year refresh cycle, paired with new customer wins.”
“The vast majority of Apple’s installed base is composed of households with higher discretionary income, therefore owning each device for its own unique capabilities is easy to justify. Because each device is upgraded at different points, consumers don’t have to stack purchases within a single year,” Cho writes. “For example, someone may upgrade their iPhone in the next 12 months then upgrade their iPad the year after, while replacing a Macbook every three to four years. The impact to the wallet doesn’t happen all at once so, even if having extra devices only offers marginal utility, the annual expense to maintain that marginal utility is often justified by many people, particularly Apple’s significant base of affluent consumers.”
“So no, I’m not buying into the cannibalization theory,” Cho writes. “The installed base of older iPad users will move to the next iPad. They have the money to do it and, quite frankly, an iPad is a much better content consumption device than the iPhone and MacBook. People will continue to own multiple devices and will make upgrades at different points of a products lifecycle.”
Read more in the full article here.
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Analyst: Larger ‘iPad Pro’ pushed back to Q215; Q1 to see under 10 million iPad units shipped – November 13, 2014