Apple (AAPL) held its Q4 2014 earnings call yesterday, and despite (unsurprisingly) record profits from the iPhone and Mac departments, CEO Tim Cook admitted that the iPad isn’t doing as well as it used to — and, rather amusingly, the stagnation of iPad sales seems to be rooted in the same underlying cause of slowing PC sales: After buying an iPad or PC, unless there’s some newfangled game or app that requires the latest hardware, there’s scant reason to spend a few hundred dollars upgrading to the latest model. Perhaps the iPad isn’t quite the post-PC dream prophesied by Steve Jobs and other pundits and visionaries.
For the last two and a half years — essentially since the Retina display debuted on the iPad 3 — Apple’s tablet sales have been flat or down. This doesn’t mean that the iPad isn’t selling — Tim Cook was quick to point out that Apple has sold 237 million iPads in the last four years — but unlike the iPhone, which is still growing at an insane rate, iPad sales are flat or down, averaging around 14 million units per quarter for the last 10 quarters.
Apple unit sales of the iPhone, iPad, Mac, and iPod over the last four years [Image credit: Ars Technica]
It isn’t entirely clear why this is the case — and it’s even more troubling (for Apple) when you consider that the iPad Mini also came out during that period, but was unable to boost sales significantly. What appears to be the case, however, is that iPad owners hold onto their devices for a lot longer than smartphone owners. While iPhone owners are strongly encouraged to buy a new phone every two years, there’s no such driving force behind new iPad sales — as long as your tablet still runs your apps, there’s nothing stopping you from using your iPad 2 or 3 until the battery finally dies (and seemingly, there are still a lot of older iPads out there with batteries that are more than capable of lasting through a movie or two).
In short, the iPad is a victim of its own success — and, whether you like it or not, testament to Apple’s design and manufacturing prowess, too. If you have the iPad 3 with Retina display, the only significant reason for upgrading is weight reduction (the iPad Air is a lot lighter). As far as we’re aware, iOS 8 and all of the latest apps still work just fine on the iPad 3– which is now just over two years old.
iPad Air vs. iPad: Except for weight reduction, there’s no compelling reason to upgrade
Read: PC obsolescence is obsolete
Of course, the exact same thing can be said of the ailing PC industry, too. If anything, the situation is even worse: With only incremental improvements in processor performance and battery life, and the last-gen console gaming anchor, there’s nothing really wrong with a five-year-old laptop or desktop. We may finally start to see some movement in the laptop space with high-efficiency GPUs like Nvidia’s Maxwell and the proliferation of high-dpi screens, but we’ll never again see return to market growth, especially while smartphones continue their rampant rise to personal computing primacy.
New PC designs that can bend, rotate, and convert into tablets are all the rage — but they only stop PC sales from declining further
Much in the same way that Intel and OEMs have tried to breathe new life into the PC market with ultrabooks and two-in-ones, it’ll be interesting to see what Apple does about slowing iPad sales. During the earnings call, Tim Cook said, “Because we’ve only been in this business for four years, we don’t know what the upgrade cycle will be.” Perhaps next year the iPad Air 3 — or the rumored large-screen iPad Plus/Pro — combined with fading batteries will be enough to get existing iPad owners to upgrade. I doubt the iPad Air 2, which is simply a thinner iPad Air, will ignite sales.
There’s always the nuclear option, too: Apple could forcibly obsolete older devices. In fact, just this morning, Apple announced that, by February 2015, all apps submitted to the App Store must include 64-bit support (i.e. the A7 SoC and later). This doesn’t mean that 32-bit versions of existing apps are going away — but it does mean that your older 32-bit iPad will be able to run fewer and fewer apps… which, if I do say so myself, sounds like an excellent reason to upgrade. Thanks, Apple!
Now read: There can only be one: Smartphones are the PCs of the future
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