What it is: The iPad defined the tablet market. While initially a hot seller, iPad sales have continued to drop over time.
Many people worry that iPad sales are going down because people aren’t finding the iPad useful any more. That’s like saying restaurants are in trouble because once they sell a meal to a customer, nearly 100% of those customers don’t order another meal right away.
If you look at the initial sales of the iPad, you can see that sales skyrocketed right away. That’s because the iPad basically eliminated the need for a netbook. Unlike netbooks that were compromises of all sorts from their minuscule size to their underpowered processors and tiny hard disk space, the iPad redefined the tablet market. Sales skyrocketed because so many people wanted an iPad. Now sales are dipping not because people no longer find an iPad useful, but because their original iPad works perfectly well so there’s no need to replace it.
In the smartphone market, people are trained to replace their phones every two years once their two-year contract runs out. That creates a constant two-year cycle of smartphone sales. That type of built-in replacement cycle doesn’t exist in the tablet market.
If you look at each new iPad model, it essentially gets thinner, lighter, and more powerful. Yet there’s little reason for more power if your current iPad still works. Many people still use the original iPad 1 model that came out in 2010. Most likely those original iPad 1 owners won’t upgrade until at least a five-year cycle occurs. Most likely the iPad is closer to an eight or ten-year cycle than a two-year cycle.
Ignoring sales trends, you can see that the iPad recently sold 10 million units, which is about 9 million units more than Microsoft sold of their Surface tablets. While Surface tablet sales are trending up, iPad sales are trending down. Will they ever meet and switch places? Probably not.
The basic reason iPad sales are trending down is that most people who want an iPad already have one. Where the market for iPads exists is in the enterprise market, which is why Apple teamed up with IBM to create enterprise iPad apps. In the consumer market, there’s little reason to get a new iPad until later this fall. That’s when Apple will announce faster, more powerful iPad models with split screen multitasking along with a virtual keyboard that doubles up as a trackpad.
You’ll be able to get some of these benefits from the latest iPad Air 2 models, but to take full advantage of these latest features, you’ll need a more powerful iPad. That will give people a reason to buy a new iPad.
With just minor hardware improvements, there’s no reason why people should continue buying a new iPad every year. With major improvements, people will find a reason to buy a new iPad. Then they’ll hold on to them until another round of major improvements arrives that their older iPads can’t handle. While it would be nice for iPad sales to continue growing every year, that’s not going to happen. The iPad will likely sell in up and down cycles that rely entirely on major improvements to get enough people to upgrade.
Apple can still sell iPads to new customers, but their real growth will come from sales of iPads to existing iPad customers. Declining sales of iPads is just a minor warning that incremental improvements are never enough to get people to upgrade. Major improvements are necessary, but Apple can’t introduce major improvements every year, so expect iPad sales to rise and fall for the next few years. Apple is still selling more tablets than other manufacturers, but since they set the standard so high with initial iPad sales, anything less looks like a failure.
An iPad is a sturdy tablet that can last longer than two years. Just buy an iPad and use it for as long as you want. Then upgrade when you need newer features. That means you can expect at least five years out of each iPad you buy. How many other computer products can last that long and still be useful?