By the numbers: Is the Apple iPad in trouble?
Although the iPad has been losing market share, the Apple device is still the best-selling tablet on the market. Analysts predict its sales will rise as result of Apple's partnership with IBM.
There’s been a lot of chatter in recent days about the precarious state of the iPad, ever since Apple released its third-quarter earning report earlier this week. IPad sales declined from the same time one year ago, prompting predictions as to what will be the fate of the top tablet product on the market. Although the Cupertino tech giant saw sales and revenue increase for its iPhone and Mac products from this time last year, both categories declined for the iPad.
Let's break down the data to see where Apple's tablet stands.
Why are iPad sales declining?
Well, according to market research firm IDC, the entire tablet market is slowing down. For example, in the second quarter of 2014, tablet shipments reached 49.3 million units, IDC reports, marking an 11 percent year-over-year growth. That's a far cry from the 51.8 percent year-over-year growth of 2013. Apple, meanwhile, saw a 9 percent decrease year-over-year for its second quarter, despite shipping 13.2 million units in the second quarter.
Analysts attribute this abatement in growth to two key reasons: 1) Consumers are keeping their tablets for longer periods of time, and 2) more people are turning to "phablets" (smart phone with large screens).
Who are Apple's competitors?
Apple's tablet market share declined to 26.9 percent for the second fiscal quarter of 2014, down from 33 percent the previous year, according to IDC. That's largely due to its competitors, including companies such as Lenovo and ASUS. But even its traditional rival, Samsung – which saw a 1.6 percent growth in year over year market share – is facing stiff competition from smaller players in the tablet arena, as well as tech heavyweights such as Google and Amazon.
"Until recently, Apple, and to a lesser extent Samsung, have been sitting at the top of the market, minimally impacted by the progress from competitors," says Jitesh Ubrani, a research analyst for the IDC Worldwide Quarterly Tablet Tracker, in a statement. "Now we are seeing growth amongst the smaller vendors and a levelling of shares across more vendors as the market enters a new phase."
What does Apple do now?
As reported last week, Apple is teaming up with IBM to offer a suite of more than 100 apps to businesses via iPhones and iPads. This is in part due to lackluster iPad sales. But Apple is also widely expected to release its iPhone 6 later this year. This device would come in two versions, one with a 4.7-inch screen and the other with a larger 5.5-inch screen, Reuters reports, meaning that Apple could very well wind up competing with its own iPad Mini.
"I do believe Apple can leverage IBM's channel," Cantor Fitzgerald analyst Brian White told Reuters, noting that this partnership could increase iPad usage in such sectors as retail, finance, education, health care, and transportation.