There’s a hidden gem in Apple’s earnings – and it’s not services

“Coverage of Apple’s second-quarter earnings has focused on the record slump in iPhone sales, rising sales of services and accessories, and a bullish revenue forecast for the current quarter,” Theron Mohamed writes for Business Insider. “But stock-watchers may have missed a hidden gem in the tech giant’s results: the iPad.”

“Sales in Apple’s tablet division soared 22% to about $4.9 billion in the first three months of 2019, the fastest pace of growth in six years, CEO Tim Cook said on the company’s earnings call,” Mohamed writes. “More than half of its customers were first-time iPad buyers, he added, which boosted the base of active iPad users to an all-time high.”

“Strong tablet sales were ‘fueled primarily by the great customer response to our new iPad Pros,’ said CFO Luca Maestri on the earnings call,” Mohamed writes. “The latest model’s resolution, processing power, and support of Apple Pencil and Smart Keyboard make it a popular replacement for laptops with both consumers and professionals, he added.”

The complete iPad lineup now includes Apple Pencil support, best-in-class performance, advanced displays and all-day battery life.
The complete Apple iPad lineup now includes Apple Pencil support, best-in-class performance, advanced displays and all-day battery life

 
Read more in the full article here.

MacDailyNews Take: That more than 50% were first-time iPad buyers is important especially because some of those are “new to Apple,” meaning the iPad is helping to add to Apple’s installed base which will further help to fuel Services.

17 Comments

  1. Definitely get AppleCare. I shattered the screen on my new 11 inch. They just gave me a new one for 49.00. Had I not had Apple Care it might have cost as much as $500 or $600 to repair or replace.

  2. New latest generations of iPads are definitely a big improvement over the previous ones. The ability to use the pencil on the pro models is great and even some of the lower models can use V1 of the pencil.
    These devices can last for some time and the cycle time is longer than iPhones. Therefore getting new customers to buy the iPad is important. Increases the installed base plus obviously good for increased sales.
    It’s amazing that iPads are bringing in 80% of Mac revenue. Along with the iPhone and AppleWatch business you can see why Apple has a tendency to focus on iOS devices. Its a shame because there are some big holes in the lineup that need to be addressed.
    I also think this is time to get a bit more aggressive on pricing. The competition are catching up on quality and design and lowering the pricing will help squeeze the profit out of the competition.

    1. Price cuts won’t help Mac sales. They were constrained last quarter by CPU supplies, which means that they couldn’t move more units if they were free.

      1. Rubbish. Apple has nobody to blame for anemic Mac sales but themselves. Apple used to be a performance leader, now it’s last in line for every CPU release. Every Mac update under Cook has been YEARS late, largely constrained by antiquated chassis designs, with scarce price adjustments or non-CPU improvements inbetween.

        Apple has lost the faith of Mac users worldwide.

    2. Apple has said, repeatedly, that the majority of systems it sells, to EVERYONE (including pros) are laptops, MacBooks or MacBook Pro’s. If MOST of what people are buying is mobile, yet you’re not able to update one of your BEST sellers (MacBook Air) because Intel’s unable to provide a CPU for you, then that shows a huge weakness for Intel now AND in the future. Because this “primarily mobile” trend is not stopping. It could be that Intel eventually gets shut out of the mobile space if they can’t perform.

  3. Just frustrated me that they sat on iPad so complacently for nearly 5 years and only really accelerated development when the opposition started to look dangerous missing a great opportunity I feel. Things at last are on the up with iPad but it’s where it should have been at least 18 months ago and that’s being generous and the Mac integrations planned for the next year or so (hopefully) are well overdue. Similar short termism is sadly seen with other products too, Siri especially but AppleTV too for 3 years or so. This old policy of platuing products so as to make a delayed major upgrade look. More impressive just does not work anymore with the increased and more nimble competition. Not too much damage has been done as yet so let’s hope these warning shots manage to make it into Cooks long term memory and shake his brain into gear finally and that the amazing products he eternally offers actually arrive and meet with expectations.

  4. The iPad hardware is so good right now and we have a lot of choice. I can easily see why its doing so well but it’s probably going to grow a lot more. The only thing holding the iPad back now is the software and I think that’s going to change at WWDC this year. If the rumours are true, the iPad is going to be finally let loose and feel a very different product.

  5. It’s just unfortunate how Apple moved so slowly to adjust prices on the iPhone. Maybe so many Chinese consumers wouldn’t have defected to Android if Apple had moved sooner to decrease prices. Of course, I can be way off on that. Chinese consumers who do everything with WeChat don’t likely need any flagship smartphone. And then there’s the case of domestic brand loyalty by the Chinese consumer. It may not be favorable to buy U.S. products. However, Tim Cook has said how the lowering of iPhone prices accelerated iPhone sales in a few months. My belief is that Apple simply overpriced the iPhone in those particular economic conditions last year.

    I just hope I’m wrong in thinking Apple’s iPhone business in China is ruined beyond repair and that Chinese consumers won’t even consider buying an iPhone in the near future.

    I thought iPads would never regain their former sales numbers now that there are so many Chromebooks being sold cheaply by many manufacturers. I figured users would also be happier with a physical keyboard. Most of the schools are going with Chromebooks so I thought there was a great advantage of using a Chromebook because it is much cheaper to purchase than an iPad. I’m sure most analysts had said the iPad was a dying product.

    1. The iPad sales picked up because Apple built a better product finally, Mac sales can also grow if Apple got off of it’s ass and built a better product, I want a new iMac with a 32″ screen I’m done with a little 27″ screen and I have no interest in a non Apple monitor of any size.

      1. Again, unless Apple can overcome the constraints on CPU supplies, it doesn’t matter if they sell an unimaginably better computer than all of the competition. They can’t sell more computers than they have CPUs, so price, features, and quality are no longer the limits to growth. Intel is clearly unable to produce the chips that Apple needs in the volumes they require.

        I have been asking why Apple might want all the headaches that would inevitably follow a change from Intel to A-series processors. This may be why.

  6. After Apple fucked up their laptop line, plenty Mac fans got tablets to “replace” (at least for the home) their old laptops.

    Now Mac sales are down and tablet sales are up.

    How’s that for a self fulfilling prophecy? 😉

    1. Mac market share ISN’T down. Unit sales for the laptop/desktop computer market as a whole have been declining for years. You can’t blame the sales declines at other companies on Tim Cook (except insofar as iOS devices have hurt traditional computer sales).

  7. Apple hardware always trounces competition in quality and ease of use. Not sure Apple can shine in streaming services and show business.

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