Apple has reported that iPad sales declined 9.2% year on year (YoY). This is the second of two consecutive YoY declines but it is less severe than the 16.1% drop between Q1 2013 to Q1 in 2014.
The quarter on quarter (QoQ) unit sales drop in Q2 2014 was 18.8% compared to 24.9% in calendar Q2 2013. However, this difference is highly influenced by the relative differences in respective iPad inventory levels at the start of Q1 in 2013 and 2014.
Several factors have contributed to the drop in first half 2014 iPad sales:
Apple is not alone in its tablet struggles. Other competitors, including Samsung, Apple’s closest rival in the tablet space, have suffered similar difficulties in early 2014. The Android situation is more complicated, with strong price competition in that sector from smaller regional vendors and white box competitors. IHS will be updating its forecast in the coming weeks.
Despite the recent sales decline, the iPad has a long lifetime and has a large installed base which continues to expand as older iPads are frequently passed down to other users, rather than fully retired, when their owners upgrade, further expanding the installed base.
Apple remains focused on the long game, with the iPad a key part of that strategy, all of it geared to continuing to expand its installed base across its entire suite of products; smartphones, tablets and computers. The Cupertino-based company is taking steps to diversify its customer base and the use cases for its devices. This is typified by things like Homekit, the a communication and control framework built into iOS8 and the company’s recent partnership with IBM to co-create business apps and sell iPhones and iPads to IBM’s corporate customers (See earlier article, “Apple and IBM to partner in developing business apps, distributing mobile devices.”).