“Throughout 2014, Apple has been trying to shake the negative storyline among investors that its iPad business is struggling,” Evan Niu writes for The Motley Fool. “Year-over-year unit growth for the company’s tablet sales dipped into negative territory for the first time last year, and Apple has struggled to buck that trend.”
“Tim Cook has preemptively addressed concerns during earnings calls, acknowledging that the Street was expecting more when it came to iPad unit sales. Short-term nuances like changes in channel inventory and product cycle timing technically hurt Apple’s figures, but Cook argues that the market’s long-term upward trajectory remains intact,” Niu writes. “Market researcher NPD just put out a report indicating that tablet ownership in the U.S. continues to rise, and the broader product category continues to grow “at a faster rate than that of any other connected device.””
“The iPad has easily been the most quickly adopted product category compared to the iPod and iPhone before it. You may remember those product adoption curves you learned about in college. Led by iPads, tablets are progressing through the adoption phase at a breathtaking pace,” Niu writes. “Inevitably, the market will progress into the maturity phase, where most sales come in the form of upgrades. It would be premature to characterize the overall tablet market as entering the maturity phase now, but there is naturally a good portion of upgraders already. Apple’s recent ‘weakness’ in iPad sales is a function of how quickly the product was adopted, which effectively front-loaded its results toward the earlier years.”
Much more in the full article here.