“I’m not convinced that the iPad will lose relevance with users over the long haul,” Alex Cho writes for Seeking Alpha.
“I make this case because the broader tablet market also has notched year-over-year declines (averaging a 3.2% decline for the product segment as a whole). What’s more likely the culprit is the lack of exciting, new technology and the need to move the tablet form factor up from 9-inch to 11-inch formats to 11-inch to 13-inch formats,” Cho writes. “This reinforces the rumors from various other publications that an iPad Mini 4 won’t be released, thus indicating ‘end of life’ of miniature tablets in favor of bigger tablets with bigger screens.”
“The tablet market is not saturated. The problem with the tablet market is the unusually long refresh times. In the case of Apple, we may be looking at a refresh time of 4 to 5 years,” Cho writes. “So next year, the support of new customers, paired with a huge population of older iPad owners, will drive growth in terms of units, and assuming the product cadence shifts to higher ASPs due to 13-inch tablet devices, gross margins also will improve. What this indicates is that multi-year refresh cycles, paired with the incremental growth of new iPad owners, are what’s driving the lumpy growth in certain years.”
Read more in the full article here.