iPad Sales Slump As Android Tablets Soar

There have been a number of signs that the rush of sales on the iPad was slowing, but data from IDC today puts the retail success of Apple’s tablet into an interesting position.

The analyst’s numbers suggest that total iPad sales in 2014 will be down by an eighth (12.7%) measured year on year, although that still represents almost 65 million unit sales. Apple’s year on year drop is at odds with the growth of the tablet market by 7.2%, although in a clear nod to a saturating market that overall tablet growth level is down from 52.3% during 2013.

Apple's iPad Air 2 (image: Ewan Spence)

That growth coupled with falling sales of the iOS tablets should be good reason to ring the alarm bells in Cupertino. Every tablet manufacturer has had to contend with the longer than expected product cycle times for consumers to replace their existing tablets. Many thought this would be on a yearly basis, akin to the smartphone. Instead it has more accurately reflected the 2-4 year cycle of PC and laptop replacement. So why are Apple’s numbers down compared to others?

Apple’s iPad Air 2 (image: Ewan Spence)

Apple’s Android opposition has a number of advantages. Chief amongst them is the diversity of the range of devices offered. From cheap and cheerful eight-inch tablets all the way to the reworked visions of Samsung and Sony, the Android tablet world has continually innovated its way back into contention alongside the iPad. With a wider manufacturing base, costs can be lower and tablets designed for the budget $99 market can happily sit alongside the latest Galaxy Tab from Samsung.

Tablets are still seen as secondary devices, a piece of hardware to buy after your smartphone. Adding a second expensive piece of Apple kit is asking a lot of the user, when they can nip next door to pick up the latest off-brand tablet with 85%-90% of the capacity for just over $100. It won’t be pretty but it will be functional, and that’s what most people want in a tablet.

Apple’s approach to tablets is to focus on the high margins, either by selling high-end and high-cost hardware, or older tablets with a lower bill of materials due to the ease of availability of parts. This approach is clearly out of step with the rest of the tablet market.

(Read more about Apple’s iPad Air 2 / iPad Mini 3 approach to the consumer marketplace),

The Apple iPad Range (image: Apple.com)

To be fair to Apple it has been here before. The iPhone range never reacted to the path of increasing cannibalization taken by Android handsets that were trading profits for market share. Apple stayed on the sidelines of that battle, maintaining high margins and allowing the iPhone to become a powerhouse of a line item on Apple’s financial spreadsheets.

Why should the iPad be any different?

(Read more about the differences between iOS 8 and Android 5.0 here on Forbes).

It’s fair to say that more people are buying Android tablets than in previous years, and if this was the only factor in Apple’s loss of market share, then it could be easily rationalised away as a growing market at the lower end where the iPad does not fight.

Unfortunately Apple’s shipments of the iPad are down, and that’s what makes those numbers very interesting. The iPad is slowing down far faster than Android powered rivals, partly due to the increased personal investment in buying a tablet, and the fact that most tablets are already doing what users want them to do, so why change for ‘next year’s model’ when it already does everything I need?

I’m not sure how Apple can explain this one away if I’m honest. I don’t think the reason is as simple as ‘no new features’ on the iPad, but neither do I think it is the lack of growth in specifications on the iPad Air 2 and iPad Mini 3. There are other forces at play, forces that are tending towards Android instead of iOS. Sales are still healthy across the board, but the signs are pointing towards a market approaching saturation with current tablet technology, to a mature market space where specifications are secondary and last year’s model still works fine, and to a landscape where everyone who wants a tablet already has one.

(Read more about Samsung approach to the Note 4 phablet sales).