Apple Inc. Market News: iPhone Sales Boost Q4 2014, But iPad Sales? Not So Much
Apple Inc. released mostly good news for its shareholders in the build-up to the holiday season, forecasting a big boost in iPhone sales following its release of the iPhone 6 and iPhone 6 Plus. But what's happening to iPad sales?
A Great Quarter With More to Come
On Monday, Cupertino technology titan Apple Inc. announced financial results for its fourth quarter 2014, posting revenue of $42.1 billion and net profit of about $8.5 billion for the period (up about 13 percent).
"Our fiscal 2014 was one for the record books, including the biggest iPhone launch ever with iPhone 6 and iPhone 6 Plus," said Tim Cook, Apple's CEO, in the company's press release.
"With amazing innovations in our new iPhones, iPads and Macs, as well as iOS 8 and OS X Yosemite, we are heading into the holidays with Apple's strongest product lineup ever. We are also incredibly excited about Apple Watch and other great products and services in the pipeline for 2015."
Apple predicted its 2015's first quarter would bring upwards of $66.5 billion in revenue, especially optimistic of its newest iPhone 6 and the holiday season sales upcoming. Apple's shares rose 1.3 percent to around $101.10 after the announcement was made on Monday, according to Reuters.
But iPad Sales Slump, Again
However, sales of the iPad -- two new models of which Apple unveiled at an event last week that underwhelmed most watchers -- continued to drop for the third quarter in a row.
Although obviously the freshly unveiled iPads were not part of the fourth quarter results, Apple's tablet sales continue to be a sobering part of the company's financials.
In the fourth quarter 2014, iPad sales dropped to 12.3 million, a 6.11 percent downward trend from the previous quarter. In addition, as The Verge noted, that previous quarter represented a 16 percent decline in iPad sales over the previous year.
And the overall sense by tech analysts is that the new iPads are not going to help that product category very much in the near future.
Why Aren't People Buying iPads?
There are a few theories as to why the iPad is no longer a strong seller for Apple, especially compared to its iPhone lineup. The truth is likely a combination of these factors.
1. iPads are incremental technology products, not essential: The old argument against tablets as a viable product, in general, might be at least part of the reason why sales for the iPad are slumping. People simply view smartphones and computers as more essential to everyday life, while tablets are more identified as luxury products.
2. Add to that the two-year cycle that wireless carriers in the U.S. generally go by for smartphones, and you have a consumer incentive to upgrade phones on a regular basis. Such incentives are rare for tablets.
3. According to MarketWatch, Americans upgrade their iPads up to every four years, as opposed to two for iPhones. And iPads make a great hand-me-down, with up to twice as many iPad owners likely to give their old tablets to a family member, eliminating even more of the possible market.
4. Additionally, older iPads seem to keep users happy, and improvements year-to-year tend to be less motivating for upgrading than with smartphones. Especially this year, as we recently noted, Apple barely changed anything with the iPad mini 3.
5. Other manufacturers like Samsung have caught up to Apple on quality, and while Apple has expanded its range of iPad options -- screen sizes, price points, etc. -- myriad other options now exist in the tablet market.
6. Tablet sales are declining and the market seems to be stabilizing across the board.
What do you think? Were you excited by the new iPads or do you think you'll wait until a bigger upgrade next year? Are you happy with a non-Apple tablet that's cheaper? Or do you think tablets are a waste of time?
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