Apple’s iPad business isn’t as bad as it looks

“Apple reported a 19% year-over-year drop in iPad unit shipments and a full 22% year-over-year drop in iPad revenue, making it the company’s worst-performing business unit by far,” Ashraf Eassa writes for The Motley Fool. “Although these results are quite disappointing — making it increasingly difficult to have confidence in the future of this product line — the business isn’t in as dire shape as it appears.”

“Apple shipped 13.08 iPads, but channel inventories were down 700,000 units, which suggests that actual demand was more like 13.78 million units. Performing the same math for the year-ago quarter, Apple increased channel inventory by 900,000 units, meaning that underlying customer demand was 15.22 million units,” Eassa writes. “To be clear, demand was still down year-over-year and that’s far from ideal, but adjusting for these channel inventory dynamics, it looks like the decline was ‘just’ 9.4%.”

“Cook tried to reassure investors that the company has “some exciting things coming on iPad” and that he is ‘very optimistic about where [Apple] can take the product,'” Eassa writes. “Unfortunately, Apple management has been bullish about the iPad business for a while now, but it’s still hard to see where the bottom will ultimately be and even harder to predict how much the business can grow once it hits that bottom.”

Read more in the full article here.

MacDailyNews Take: Down 9.4% YOY with no new product for holiday shopping season leads us to believe that we’re at or very near the bottom and that iPad is poised to return to growth with the next batch of updates.


  1. 40-50 million iPads a year is a nice little business. I wouldn’t worry about it one bit. The fact is the iPhone Plus models are cannibalizing iPad sales, and for Apple, that’s a good problem to have. Nonetheless, Apple is continuing its slow-and-steady-wins-the-race philosophy and continuing incremental improvements…until one day those will add up to a) tablets current users want to upgrade to; or b) tablets that first-time buyers will flock to.

    1. Tech, you understand the long plan. Most of these guys have NO IDEA.

      PS, anyone who says “marketshare” has NO idea of what is going on. Apple has LOYALITY and PROFIT Share. Apple is making 90% of all the profit in the world on tablets. YEAR after YEAR after year. Just how is that bad???

      PS, who thinks that tablets are going away???

  2. I love my iPad for what it does, but real work is a real pain in the arse. If Apple wants the iPad to replace laptops, they need to make some major upgrades and enhancements. More memory, a file system, and mouse support for occasional use.

    Those changes would allow developers to create sophisticated professional software. iPad sales are all about software solutions, ease of use and price. A touch IU has major limitations when it comes to accomplishing real work.

    If Apple wants me to upgrade, they need to give me a reason and a solution.

    1. Teflon, you still need a truck for your purposes, and I think Apple is fine with that. They’re targeting the vast majority of home users who can use a tablet for what they need, and, increasingly, those business users who use custom apps. Like I said, it’s a good business that will yield Apple many billions each quarter. Apple will continue to offer Macs, as well, and that business is not chopped liver either.

    2. Teflon, I am glad you like your iPad. It was NEVER made for big work. Buy a Mac for big work, an iPad for fun and updating work on the run, and an iPhone for communicating.

      You are right about most of what you said. Just buy the tools you need and don’t buy into bloggers hype. Ps. Apple products tend to last a long long time, so the update cycle is slow, also look on eBay. Apple products years old still selling for top dollar. Everyone else sells like JUNK.

    3. Please define “real work”. “more memory”? Absolutely.
      “file system”? What type and why? “mouse support”?
      No need. The Apple Pencil is much better. The only
      “real work” I’ve done is printing photos and using
      software on the iMac for adjustment. The iPhone and
      iPad make that redundant. No need for photo albums
      or carrying pictures in your wallet.

  3. Sort of. Apple is thinking long term. People who go Apple, don’t go go back. People who buy one cheap android tablet, may buy another each year, cheap and who cares what brand.

    So Apple makes long term customers who buy iPhones, Apple watches, etc over and over.

    Now Apple gear lasts a long time so the refresh rate is slow, but it just keeps on and on and on.

    Think it thru. Loyalty to cheap…. does NOT exist.

  4. The iPad has a niche but Tim Cook and others have discovered that his customers believe that real work requires a Mac.

    Which goes to show that an accountant and a designer who have teams of assistants to do all the donkey work clearly have no idea about what people use computers for.

    I should imagine that if Tim Cook had to prepare his own financial presentations he would use a Mac and Microsoft Office – at least until the dumbing down of iWork was reversed.

    A landscape table in a portrait document is no longer possible in Pages. Clearly Apple’s financial documents are not produced with Apple software.

    Memo Tim: do some real work before making comments about running Apple on an iPad.

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