Subscribe / Unsubscribe Enewsletters | Login | Register

Pencil Banner

Apple's revised iPad strategy to stress more, not less, PC

Gregg Keizer | Aug. 10, 2015
Longer-than-expected tablet lifespans have led to a sluggish market for Apple's iPad, but the company seems poised to pivot by pitching the iconic device as more, not less, like a personal computer, an analyst said today.

ipad_ios_9_multitasking_picture_in_picture
Credit: Apple

Longer-than-expected tablet lifespans have led to a sluggish market for Apple's iPad, but the company seems poised to pivot by pitching the iconic device as more, not less, like a personal computer, an analyst said today.

"At the beginning of the [tablet] market, people bought tablets because they were different from PCs," said Carolina Milanesi, chief of research and head of U.S. business for Kantar WorldPanel Comtech, in a Friday interview. "That was what got early adopters interested."

Because tablets were seen as something other than a personal computer, in other words, they were attractive, especially to those who already owned smartphones -- Apple's own iPhone, in particular. The tablet, the thinking went, was simply a larger smartphone -- it relied on the same operating system, the same app ecosystem, the same touch-only user interface (UI) -- minus the calling.

That worked for a while.

Slow sales

Since then, tablet sales, iPad included, first stalled and then slumped. According to research firm IDC, tablet shipments declined by 7 percent in the second quarter after falling 4 percent in the first. Meanwhile, iPad sales have contracted for six straight quarters, falling 23 percent year-over-year in the first quarter of 2015, 18 percent in the second.

Most analysts have attributed slowing iPad sales to stretched device lifespans, longer than what they had figured when the category debuted with the original iPad in 2010. Then, many believed that buyers would refresh their tablets every two years or so, a cadence similar to smartphones.

The reality turned out differently, with intervals much more like PCs than phones.

Kantar's data supported that. Of the iPads currently in use in the U.S., more than a quarter -- 28 percent -- were iPad 2, the March 2011 model; one-six, or about 16 percent, were iPad 3 (March 2012); 8 percent iPad 4 (October 2012); 14 percent iPad Mini (November 2012-2014); 12 percent iPad Air (November 2013); and 4 percent iPad Air 2 (October 2014). Close to half -- 44 percent -- were models 3+ years old.

According to Kantar, 30 percent of the iPad owners they polled have had their current tablet for 36 months or more.

"It's not lack of engagement," she said, that hampered iPad replacement, citing statistics from Kantar's surveys that showed larger fractions of the iPad base using their devices daily than those with rival hardware. For example, 39 percent of iPad owners used it daily for email, almost double the 21 percent of Kindle Fire owners.

Lengthening PC replacement cycles -- a cause, say experts, for the 14-quarters-and-counting slump in personal computer shipments -- were due in part to owners' disengagement. They used their PCs less as they turned more to their smartphones for core chores like email, social media and Web browsing.

 

1  2  Next Page 

Sign up for CIO Asia eNewsletters.