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Pressed by falling numbers, Apple adds iPhone and iPad Pro to back-to-school promotion

Gregg Keizer | July 7, 2016
Inclusion of iPad Pro also syncs with Apple's assertion that a tablet-keyboard combo can satisfy the laptop itch

Apple is including the iPhone and iPad Pro in this year's back-to-school promotion because the company must manage a slumping smartphone as well as a stuck-in-decline tablet market, an analyst said today.

Apple kicked off its annual back-to-school sales campaign last month, handing over Beats headphones to buyers of most Macs, all models in the 2015-2016 iPhone 6 and 6S series, and any iPad Pro.

The inclusion of the iPhone (6, 6 Plus, 6S and 6S Plus) and the iPad Pro (9.7-in. and 12.9-in.) was notable because Apple's smartphones and tablets were not eligible purchases for 2015's back-to-school promotion.

That, said Carolina Milanesi, an analyst with Creative Strategies, was easy to explain: In 2015, iPhone sales were up dramatically in the June quarter. Apple hadn't yet come to grips with the fact that the iPad, already in decline for five quarters, was not going to bounce back.

A year later, things are different.

"The reality of iPad sales really had not sunk in [then] as much as it has now," Milanesi said in an interview, referring to Apple's insistence in 2015 that iPad sales would return to growth. "Apple thought that the iPad's lifecycle was a bit longer than the iPhone, and that eventually customers would upgrade," she added. "That hasn't happened." The tablet replacement cycle simply doesn't resemble the smartphone cycle, with either very long intervals between upgrades, or in some cases, buyers who have no intention of upgrading from their first purchase.

More recently, iPhone sales also turned down. During the quarter that ended in March, Apple sold 51.2 million iPhones, a 16% reduction from the same period in 2015. iPhone revenue was off 18%, or $7.4 billion, year over year.

To drive sales of the iPhone and iPad Pro, Apple put them in the promotional bucket.

"Apple enters Back to School 2016 in a very different market dynamic and the promotions reflect that," Milanesi wrote in an analysis published Wednesday on Tech.pinions.

Customers who purchase an eligible iPhone or iPad Pro through Sept. 2 will receive either a pair of Powerbeats2 wireless headphones -- Apple applies an $199.95 credit to the order for a zero balance -- or a pair of Beats Solo2 wireless headphones. The Solo2 lists for $299.95, so the buyer pays $100 out of pocket for that option.

Consumers who buy an iMac, MacBook, MacBook Pro, MacBook Air or Mac Pro receive a pair of Beats Solo2 wireless headphones and are credited the full price of $299.95 on their order.

Educational discounts also apply to the iPad Pro and Mac lines, ranging from $20 on an iPad Pro, to $50 on a MacBook and MacBook Air, to $100 on a MacBook Pro. The discounts top out at $300 on the most expensive Mac Pro.


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