Booming #iPhone sales were the driving force behind Apple’s record revenues in the final quarter of 2014, with its $18bn net profit the largest quarterly profit reported by any company.
Even so, one part of Apple’s business wasn’t so positive: its iPad #tablet. Apple sold 21.4m of them in the last three months of 2014 compared to 26m in the last quarter of 2013 – a 17.7% drop.
The company wasn’t alone. Research firms IDC and Canalys have both claimed that global tablet shipments were down year-on-year that quarter – the first such decline since Apple reignited the tablet market in 2010.
IDC reported a 3.2% drop in shipments to 76.1m units, while Canalys suggested a 12% decline to 67m units. Why the difference? IDC counted “2-in-1” laptop/tablet hybrids in its figures.
Both agreed on the general trend: manufacturers are shipping fewer tablets, and by extension, people are buying fewer of them. But why? Here are the main reasons.
1. Tablet buyers are hanging on to them for longer
In 2010, no one was sure how often people would want to upgrade their tablets. Would it be every 12-18 months like a smartphone, or would their upgrade cycle be longer, and more like that of computers? Five years on, it’s becoming clearer.
“The upgrade cycle is longer,” said Apple chief executive Tim Cook, in his last earnings call. “It’s longer than an iPhone, probably between an iPhone and a PC. We haven’t been in the business long enough to say that with certainty, but that’s what we think.”
“The lifetime of tablets is being extended – they are shared out among family members and software upgrades, especially for iOS devices, keep the tablets current,” said Gartner research director Ranjit Atwal recently.
If you’re a mainstream tablet owner, chances are your device is mainly used for email, social networking, light web browsing and perhaps games and video streaming. Unless you’re into processor-stretching 3D games, none of those categories provide a huge incentive to upgrade once a year.
2. Larger-screened smartphones are proving popular
The slowing growth and now decline in tablet shipments has come alongside the emergence of the “phablet” – larger-screened smartphones that first came to prominence from Android manufacturers, before Apple finally followed suit in the autumn of 2014.
Think back to the mainstream tablet use cases listed earlier: a big smartphone can do a capable job at all of them. Especially as the boundaries between the two categories narrow.
Canalys estimates that in the last quarter of 2014, seven-inch tablets accounted for half of all Android tablet shipments – and noted that these are exactly the devices most under threat from larger-screen smartphones.
Meanwhile, even Apple’s keenest customers may have stopped and thought about a new iPad purchase in the final months of 2014, given the launch of the iPhone 6 and 6 Plus. IDC’s senior research analyst, Jitesh Ubrani, saw the “excitement around the launch of the new iPhones” as a key factor in iPad’s tough quarter.