Monday, 9 January 2017

After A Poor 2016 How Is Apple Going To Move The Needle On iPad Sales?


After Apple reported its executives had been hit in the pay packet for its poor performance in 2016 there can no longer be any denying that the company's leadership team has been missing goals with new products.

Sales have been down in all three of its main hardware earners, iPhone, Mac and iPad. In the latter its been a multi year trend which suggests that Apple has no innovation to offer in the tablet market. With the Mac market falling too - and recent announcements having been poorly received, one can't help but wonder whether the malaise will end at the iPad.

Reputationally Apple needs to fix the iPad sales slump with some compelling new devices. The iPad Pros may have persuaded Apple's customers to buy more expensive devices, but they were a failure in outright sales numbers and overall numbers continued to fall through 2016.

Apple's short term fix, if the rumours are to be believed, will be to launch three new iPads in the near future - two Pros and a replacement Air. The former will stay much as they are, possibly with an iPhone-like 'S' model that upgrades to better internals, whilst the latter is suggested to be a new, narrow bezel device with a 10.5" display.

That doesn't sound like a game changing strategy to me. It also ignores the iPad Mini again, even though smaller tablets (and cheaper prices) seem to draw in more buyers across the tablet market as a whole.

If Apple fails to fix the iPad and isn't able to resolve its Mac crisis, how likely is it to be able to maintain its iPhone success? At the point where shareholder value begins to suffer as a result of too many unambitious upgrades, Apple's management team could find itself in a very sticky position.

It's amazing to think that the people responsible for the world's most profitable company are just a few poor quarters away from replacement, but in a world where Nokia, IBM and Blackberry are around to remind us what happens to companies who are slow to recognise the market changing under them, I think that may just be the case.

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