Tim Cook reaffirms his belief in the iPad’s potential

Written by  //  July 27, 2015  //  iPad  //  Comments Off on Tim Cook reaffirms his belief in the iPad’s potential

According to Jordan Golson, Apple CEO talks up the iPad as sales numbers fall.
iPad

Apple reported record March-quarter sales and profits yesterday, providing incredible numbers for the iPhone (61.2 million units worth $40.3 billion), which accounts for more than two-thirds of Apple’s $58 billion in quarterly sales.

While the company reported strong sales across many of its divisions, including the App Store and the Macintosh, iPad sales were down year-over-year, continuing a roughly year-long trend.

During the quarter (January through March), Apple sold 12.6 million iPads, the lowest total for the March quarter since 2012, and a drop of more than 3.7 million units year-over-year. In fact, iPad sales dropped to the lowest second quarter revenue since 2011 at $5.4 billion.

Still, when asked about the drop during yesterday’s earnings conference call with analysts, Tim Cook was upbeat about the prospects of the iPad.

“Look at the underlying data, and it makes you feel better than the sales do,” said Cook. He revealed that around 40% of iPad buyers in the US are getting their first tablet, but in China, that number is closer to 70%. “These numbers are not numbers you’d get if the market were saturated.”

Customer satisfaction for the iPad is near 100%, said Cook. “I believe the iPad is an extremely good business in the long term,” but he wouldn’t predict when it might begin to grow again.

Cook said that the iPad is the number one tablet in sales, apps, usage, and customer satisfaction.

He reiterated his belief that the iPad will be a big player in the enterprise, with 77% of corporate IT buyers planning to purchase tablets looking to buy the iPad. He also name-checked the IBM partnership that was announced almost a year ago.

Additionally, the iPad set new quarterly sales records in both Japan and Greater China, even as it was weaker in some other geographies. Cook attributed some of the weakness to cannibalization, as buyers spend on the new iPhone 6 and 6 Plus, plus the Mac. Considering the fact that both those categories of products are actually more expensive than the iPad, Cook was not worried about that cannibalization.

He has said in the past that he preferred that Apple cannibalize itself than have someone else do it.

During the introductory remarks, Cook said that Apple had seen a tremendous amount of interest from companies looking to use the iPad to “transform how work gets done,” and he revealed that a “vast amount” of the opportunities identified in the Apple/IBM partnership are focused specifically on the iPad.

Cook also shared that sell-through on the iPad was not as bad as the numbers showed, as the company actually sold 13.7 million tablets to consumers while reducing channel inventory (the amount of product held by distributors) because of the end of the holiday season.

Cook is bullish on the iPad, but what do you think? Let us know your thoughts in the comments below.

 

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