In spite of lower year-over-year iPad sales, Tim Cook says not to worry

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Date: Thursday, January 29th, 2015, 08:37
Category: Finance, Hardware, iPad, iPhone, News, retail

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iPad sales may be on the decline, albeit Apple CEO Tim Cook says not to worry.

Per 9to5Mac and Macworld, Apple’s recent financial report noted “all-time record revenue from iPhone and Mac sales as well as record performance of the App Store,” while remaining silent on iPad sales. With year-on-year sales down 18%, and a reduction in average selling price meaning revenue was down 22%.

Tim Cook acknowledges that the switch to larger-screened iPhones mean the iPad is being squeezed from both sides.

“There’s probably some level of cannibalization that’s going on, with the Mac on one side and the phone on the other,” said Cook.


It’s also undeniable that people upgrade their iPads less frequently than their iPhones, Cook putting the number at “somewhere between” the 2-year cycle of the iPhone and 5-year cycle of Mac.

While some have argued that this is a big ask in a saturated market, Cook argues that this isn’t the case.

“First-time buyer rates are very high. By very high, I mean that if you look at some of the developed markets, like the US, Japan, the UK, you would find that 50 percent of the people are buying an iPad for the first time. If you look in China it’s over 70 percent. And so when you have that kind of first-time buyer rates, you don’t have a saturated market.”

Cook says that high usage figures also demonstrate the continued popularity of the device.

Usage is six times our nearest competitor. Usage measured in web browsing is like 71 percent of total tablets. Also the commerce taking place across the iPad is enormous. Essentially over 80 percent of the commerce on tablets is taking place on iPad.

While there would be no “miraculous change” in short-term sales, he believes that the IBM partnership is a sufficiently big deal to “move the dial” on sales, with 100 vertical market apps expected to be available by the end of the year.

“I think the partnership with IBM and the work that we have going on in the enterprise [sector] is profound, I think we’re really going to change the way people work,” said Cook.

Cook didn’t comment on the rumored 12-inch iPad Pro, merely observing that new products were in the pipeline.

Stay tuned for additional details as they become available.

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