iPad Sales Continue To Fall: I Blame Tim Cook

Apple sees iPhone sales grow 22.1% to 48M in Q4 2015, but iPad sales declined 19.5%

Those considering buying iPads, however, were likely trying to figure out if they want the new iPad Pro or even the iPad mini 4. Tablet sales in general haven’t been doing well, a trend that Apple has not been able to counter with the iPad. In fact, iPad sales have been falling for more than a year now, and this is the first quarter Apple has sold under 10 million iPads since Q4 2011.

Boldfaced emphasis added by me.

The iPad was supposed to usher in a new computing paradigm, a new way for people to interact with a device. In fact, it was supposed to be something as world-changing as the original Macintosh.

That revolution seems to have come to an abrupt halt.

I can understand Android tablet sales plummeting. The market was flooded with tablets that were low-cost and absolute shit — thank you for your greed and contempt for your customers, Borders Books, Best Buy, and Wal-Mart — but the iPad still falling?

I think at this point it’s fair to point the finger at another factor.

That factor is Tim Cook is not a leader.

Remember when the iPhone was introduced waaaay back when?

There were two models. A 4GB and an 8GB one.

Let me turn to iMore’s history: History of iPhone: Apple reinvents the phone:

Then there was the price. The iPhone debuted at $499 for the 4GB and $599 for the 8GB model on-contract. Those prices weren’t unheard of at the time—early Motorola RAZR flip phones were incredibly expensive as well—but it meant Apple couldn’t penetrate the mainstream market.

Boldfaced emphasis added by me.

But what happened next?

Steve Jobs showed he was a goddammed leader:

The price, however, kept it from getting into as many hands and lives as Apple wanted. So, at the September 5, 2007 “The Beat Goes On” music event, Steve Jobs not only introduced the first iPod touch, he announced they weredropping the 4GB iPhone entirely, and dropping the price of the 8GB iPhone to $399.

Boldfaced emphasis added by me.

Within three months of the iPhone’s introduction, Jobs already killed one of the models and dropped the price.

And this was for a product that was popular beyond Apple’s wildest imaginings!

Here’s Apple’s press release, quoting Jobs himself:

“The surveys are in and iPhone customer satisfaction scores are higher than we’ve ever seen for any Apple product,” said Steve Jobs, Apple’s CEO. “We’ve clearly got a breakthrough product and we want to make it affordable for even more customers as we enter this holiday season.”

Boldfaced emphasis added by me.

Where the hell was Tim Cook at the time? Didn’t he learn anything from that bold move?

What we’ve had from the post-Jobs Apple is the atrocity of the iPad Mini actually going up in price, from its original ridiculous US$329 (it should have been US$299!) to US$399.

What the hell kind of leadership is that?

It’s not.

It tells me those in charge have zero confidence in the product and so want to squeeze every possible stray nickel out of any unit that happens to sell.

Steve Jobs wouldn’t have pulled that shit.

Not at all.

He would have said, “You know, the iPad isn’t selling in the volume I want.People really need to have this. It will change their lives. We cut prices with the iPhone, so let’s do that with the iPad too. What we lose on per-unit sales I’m sure we’ll make up in volume, accessories, app sales, and customer good will. For some people this will be their first Apple product. And that will show them what Apple means as a brand. They’ll never touch an Android device ever again. And we’ll exterminate all those crappy tablets that are misleading people about what the iPad is like.

That is leadership.

Jobs always had a vision of computing for the rest of us. From the Isaacson bio:

Their first substantive disagreement was over how to price the Macintosh. It had been conceived as a $1,000 machine, but Jobs’s design changes had pushed up the cost so that the plan was to sell it at $1,995. However, when Jobs and Sculley began making plans for a huge launch arid marketing push, Sculley decided that they needed to charge $500 more. To him, the marketing costs were like any other production cost and needed to be factored into the price. Jobs resisted, furiously. “It will destroy everything we stand for,” he said. “I want to make this a revolution, not an effort to squeeze out profits.” Sculley said it was a simple choice: He could have the $1,995 price or he could have the marketing budget for a big launch, but not both.

“You’re not going to like this,” Jobs told Hertzfeld and the other engineers, *but Sculley is insisting that we charge $2,495 for the Mac instead of $1,995.” Indeed the engineers were horrified. Hertzfeld pointed out that they were designing the Mac for people like themselves, and overpricing it would be a “betrayal” of what they stood for. So Jobs promised them, “Don’t worry, I’m not going to let him get away with it!” But in the end, Sculley prevailed. Even twenty-five years later Jobs seethedwhen recalling the decision: “It’s the main reason the Macintosh sales slowed arid Microsoft got to dominate the market.”

Boldfaced emphasis added by me.

Jobs always described computers as a bicycle for our minds:

Bicycle. Not a Rolls Royce.

In the current market — which can’t be ignored — the iPad is priced like a Rolls Royce.

Price it like a bicycle.

So, Tim Cook: Are you are leader or just someone maintaining the status quo?

Cut the iPad’s fucking price.

Show some leadership.

reposted with permission from Mike Cane's xblog

16 Comments on iPad Sales Continue To Fall: I Blame Tim Cook

  1. They already have lower margins for ipad than for other products and the ipad was priced like that from the start. Plus Apple is the definition of high prices so it’s hard to ask lower prices from them.

    They made mistakes and keep making them here though. The mini was launched at low res, should have been high res and 400$ from the start -the high price is what Apple does,excluding ipad everything is 2-3 times more than it should be.
    After that on many occasions Apple didn’t had new models when they needed them. They also stopped pushing the specs,the design,the features forward. With the Pro they just gave up on the concept of the tablet and made a laptop. The Pro is also too bulky, too heavy and at a price that isn’t expanding Apple’s reach and filling the gap between ipad and Mac (500-900$ price band). The Pro is priced to fix the ipad declines but will hurt Mac sales and provide little upside overall.

    One thing people did not notice was that in the call they announced a change in accounting, they lengthened the time period which the deferred revenue associated to ipad will be recognize from 2 years to 3 years. That means they expect refresh cycles to be 3 years now not 2. So,in other words, they kinda gave up on pushing the segment forward and the ipad will keep getting minor upgrades only that don’t drive sales.

  2. I’ve been thinking about replacing my iPad 4 with a Mini 4, but, yes, I balk at the price, especially since I want the 64GB version (so tired of the app/video shuffle), but $499 for the configuration I want is awfully expensive, and I keep telling myself there’s nothing wrong with my iPad 4 except for the lack of storage. At $399 ($299 for the base + $100 for extra storage), I’d probably do it, especially since my 4 still has some resale value.

    Excellent points.

    • @ Juli

      The iPad’s high prices also kept me using an old iPad 2 with a busted screen for far longer than was sensible. The replacement just cost too much (although replacing the screen would have been a good idea).

      Mike’s right in that cutting the iPad’s price would boost sales.

  3. I don’t think it’s pricing. I think it’s user experience. They stopped bringing unique iPad experiences and just blew up what was available on the iPhone. The tablet as a large screen can do many things that the phone cannot. Unique experiences they can invent and innovate on.

  4. I don’t even know anyone who uses a tablet today. It’s all about phones with big screens.
    If I’m going to write an iOS app, I’m going to damn sure make sure that it runs on the phone because that’s where the numbers are. The iPad was more about content consumption over content creation and I find it hard to think of someone (other than my mom) consuming content on a tablet over an iPhone. Sure there are some apps that are better suited for the larger screen, but the overwhelming majority (web pages, YouTube, Facebook) are available on the phone platform and are likely get updated more frequently. And this actually ties in to Nate’s point – that I’m going to look long and hard at the price of the tablet and the return I’m going to get on it over what I can do on my phone before I shell out hundreds of dollars. I’m also not going to pay again for the same app I’m already running on my Phone, just to get it on my tablet if the experience doesn’t dramatically improve with the larger screen. Apple could do something about this and make a category of apps that will run on both devices and only charge the customer once. Things like that would make me think about buying a new iPad. Trying to squeeze me out of every cent doesn’t.

  5. I have an iPad Air 2. Its beautiful, it really is and I like the elegance and efficiency of iOS apps. However, I also have a few Android tablets when it comes to overall navigation Android wins hands down. It is much easier to navigate around an Android tablet mainly because of the back button. That button has saved me many times. iOS is sometimes rather clunky when it comes to navigation and has frustrated me at times. Their tablets have no expandable storage other than using the cloud. These are two of the reasons why I have not fully embraced moving over to iOS from Android. It is also the reason why I probably will not replace my iPad with another if something should happen to it. Price is a factor as well, I find myself still having buyer’s remorse over how much I paid for it. I think Apple thinks its price is fine and consider themselves part of the fine wine of tablets. I don’t think they want to lower the price because it will hurt the image of them being the upper tier of tablets.

  6. Apple is growing over 30% a year and making record profits and people want to focus on iPad sales?

    The thing people don’t understand is that the most important thing for Apple is to sell it’s ecosystem and core OS, which works in Macs, iPhones, iPads, Apple Watches and Apple TV. Even Apple fans have a limited budget, and Apple is fine if people delay replacing their iPads so they can afford to buy the latest big screen iPhone and a new Apple Watch and Apple TV. (And/or subscribe to it’s monthly music service.)

    It’s difficult for Apple to grow the iPad consumer market while there is a flood of junk tablets that are not only cheaper, but probably turning a lot of people away from tablets in general. Apple can always lower prices and join the race to the bottom. That might give it some short term sales boost, but long term it’s a mistake.

    Long term, specifically for tablets, the best thing for Apple is to focus on expanding business use, which they are doing with their IBM deal. Businesses are less price sensitive and don’t want to buy junk tablets. That could be a very big market for Apple in the coming years. The iPad pro really plays into that too.

    I suspect many people are waiting for the iPad pro before making a new tablet decision. Once it goes on sale, there probably will be a huge jump in total revenue for Apple’s tablets. But if in the end, people decide all they need is a large iPhone, that’s fine for Apple too.

    The big news is that Mac sales continue to grow even as the Windows market shrinks. Long term, that’s more important to Apple too.

  7. I have an iPad 3 thats been collecting dust for over a year. I haven’t bought another one because I find the one I have boring to use. I have a Galaxy Note 12.2 Pro model that is more useful with 4 app multitasking. Apple is finally getting on bored with the iPad Pro but its over priced and way behind what Samsung has done with the Note Line.

    Its had the same freaking grid icon pattern since launch. The only thing the iPad has going for it is the App store. We’ll see if the iPad Pro sparks new life into it even though its still behind whats already out.

  8. Forgot to add. Apple no longer has a spokesman with charisma. No one thought iPad would sell. Its just a giant iPhone. However, Steve got on stage and suddenly, everyone had to have it. Tim Cook just kinda makes me roll my eyes at whatever he’s trying to push. He’s a terrible spokes person for trying to get you excited about a product. They’d been better off hiring Reed to get out there and sell their products.

  9. @Nate

    Ballmer was better. He at least was excited (Perhaps Over excited)about his product even if no one else was. And how many times can you listen to Tim Cook go, “And we think you’re gonna love it?”

  10. @Nate

    He loved Microsoft. I think that was easy to see. I miss the old days of Apple, when they were the leader and not the follower.

  11. ZDnet is pointing the finger at the iPad2.
    http://www.zdnet.com/article/why-tanking-ipad-sales-are-partly-down-to-the-ipad-2/?tag=nl.e539&s_cid=e539&ttag=e539&ftag=TRE17cfd61

    Specifically, that Apple kept it around until 2014 to fill in the “cheap iPad” hole in their lineup and now can’t stop supporting it until 2017. Which means a large portion of early iPad buyers have no big incentive to upgrade. At any price.

  12. Tablets are to phones what desktop computers are to laptops. Phones with nice 5-6″ screens are what is killing the tablet. Which works out just fine for Apple.

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