Despite Apple's Corporate Efforts and Optimism, iPad Sales Languish

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During Apple's 2016 Q2 Earnings Report, Apple reported iPad sales of 10.25 million. This can be compared to the most recent non-holiday quarter 2015 Q4 of 9.88 million. This was the last quarter before the iPad Pro (12.9-inch) was introduced in November, 2015.

If there was a rush on the iPad Pro (12.9-inch) in Q1, it didn't seem to continue into the most recent Q2.

Sales vs Revenue

However, Tim Cook, in the earnings report, was optimistic in very specific terms and said that, “In the June quarter (Q3), we expect to see our best iPad revenue compare in over two years.” What that means is that he expects the iPad revenue in 2016 Q3 to be better than the revenue was in 2015 and 2014 Q3. That's probably due to the increase in iPad Pro Average Selling Price (ASP) thanks to the US$100 premium of the iPad Pro (9.7-inch) and the higher price of the iPad Pro (12.9-inch).

iPad unit sales (millions) since 2010, by quarter.

However, in practical terms, CFO Luca Maestri later in the call punctuated short-term reality, referring to the upcoming quarter, and said, “We expect seasonal sequential declines in iPhone and iPad sales.” Meaning the number of units sold. That won't look so good.

While Apple and investors will likely be pleased that Apple will make more money on iPads compared to recent years, it would still be pleasing to see the number of units sold increase. Observers notice things like that, and it's a good measure of the health of the product line.

Boost Phase

Apple is clearly looking to boost iPad sales with a variety of techniques. The work with IBM and its corporate customers, improvements to iOS 9 (split view, slide over, PIP), better hardware in the iPad Pro line, including better displays, speakers, the Apple Pencil, and the attempt to woo PC users into the iPad tablet fold have been prominent.

However, Apple's iPad customers remain remarkably recalcitrant. It remains to be seen if all the things Apple is doing to breathe new life into the iPad will work. The nature of iOS 10, likely announced at WWDC in June, may tell us more about how Apple intends to exploit the hardware of the new iPad Pro line.

This iPad revitalization is going to take some time, but as old iPads age, time is on Apple's side.

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