Good Technology’s quarterly Mobility Index Report released Tuesday finds the iPad’s share on the tablet market still in deep decline, having fallen from 81 percent to 64 percent, while Android’s share grew to 25 percent, and Windows having grown from four percent to 11 percent in the last quarter, skyrocketing from a barely there one percent share just two quarters ago. Apple shipped 10.9 million iPads during its last fiscal quarter, representing an 18 percent drop in units shipped and a 23 percent drop in revenue, and a massive decline from the 26.4 million iPads it shipped the first quarter of 2014, since which Apple’s tablet sales have seen nothing but steady year-over-year declines each quarter. By contrast, in its latest quarterly financial statement, Microsoft reported a 117 percent growth for Surface revenue over the last quarter, representing $888 million in revenue.
It’s more and more apparent that Apple’s iPad strategy isn’t working, and is indeed failing miserably. Drawing similar conclusions, the Above Avalon blog has posted a pessimistic but clear-eyed and I think realistic analysis of what went wrong for the iPad after its first three years of meteoric growth during which Apple sold an astonishing 84 million iPads in just two years, but since which the iPad and most of the tablet market tablet have been on the decline for years with all momentum lost. The lone exception is the robust Microsoft Windows tablet sales growth noted above.
Above Avalon contends that it’s gotten to a point that Apple’s sticking with the status quo will likely lead to the iPad becoming irrelevant over time, and that a fundamental rethink of tablet computing called for, noting that brand name tablet leaders Apple and Samsung are losing share to “Others” — a category represented by dozens of companies selling mostly cheapo generic tablets that are being used primarily used to consume media. The author quite reasonably maintains that a product category with a use case defined by Netflix watching is problematic, leading to a race to the bottom in terms of pricing, quality, and features.
Meanwhile, the iPad in particular is being squeezed between Apple’s own larger screen iPhone 6 Plus and the resurgent Macbook, which are proving game changers not only in their respective categories, but for tablet computing, and it becoming much easier to recommend an iPhone or Macbook over an iPad. Many users have evidently decided that the iPhone 6 Plus’s 5.5-inch panel is big enough for their needs and consolidated their activities largely on a single device.
Above Avalon observes that consumers have held onto their iPads, on average, for three years — an upgrade cycle that continues to extend and is likely to stretch out as far as 5-6 years. To wit: “Why would someone upgrade an iPad that is just being used to watch video?” Sixty percent of iPad 2, units Apple sold in from 2011 – 2013 are still in service, even though they have a mediocre camera, slow processors by current standards, heavier form factors, and inferior screens, none of which seems to be bothering owners overmuch, and indicating that many of these old tablets are just being used for basic consumption tasks like video and web surfing, and not as productivity and content creation tools. In my own family, that would include the iPad 2 my wife inherited from me, and my brother-in-law’s new to him iPad 2 unit with cellular support and 64 GB memory.
Above Avalon maintains that if no changes made to the way iPads are equipped and marketed, “Peak iPad” is on the table in a world where smartphones are getting larger and laptops are getting smaller, and something must be done to create new tablet value propositions, redefining the device’s role in the mobile revolution.
Microsoft has arguably done that, making its Surface 3 and Surface Pro tablets unabashed MacBook rather than iPad challengers primarily. The Surface models can run the full desktop Windows 10 OS which supports the vast library of Windows apps and real multi-windowing and multitasking plus easy user access to the file directory. They have real, standard USB 3.0 ports, mouse drivers, microSD expansion slots a Mini DisplayPort, a standard Micro USB charge connector, a 3.5 megapixel front-facing camera and an 8.0 megapixel rear-facing camera with autofocus. They have an optional snap-on physical keyboard that doubles as a cover. The Surface Pro is really more of a convertible Ultrabook than a media tablet, while the Surface 3 starts at the same $500 base price as a 16 GB iPad Air 2, only the Surface comes with 64 GB of memory standard.
Indeed, a tipping point that opened the tablet floodgates for Microsoft appears to have been the 10.8 -inch Surface 3 in May 2015 with its entry-level price of $499 for a machine with a 10.8-inch display, the aforementioned 64 GB of memory, a full-size USB 3.0 port, a microSD card reader, and a Mini DisplayPort that can run full-featured desktop versions of Windows including Windows 10, while the professional grade Intel i5 powered Surface Pro 3 starts at $799 — two hundred bucks less than the base 11.6-inch MacBook Air.
Photo Courtesy Microsoft
Meanwhile the iPad base $499 model has a pathetic 16 GB of memory, no USB port, no MicroSD card reader, no support for a mouse or hard wired connection to other peripherals like printers and scanners, no real multitasking (to be partly addressed in iOS 9), and no file-level directory access — the latter which is a deal-breaker for anyone needing that facility for productivity tasks. And indeed, while you can upgrade to 128 GB memory (at a hefty price premium) none of those other features are available on any iPad at any price.
It seems improbable that Apple will be inclined to pare iPad margins enough to match the Surface 3′s base price, and Above Avalon maintains that the formula to save the iPad would be to introduce a new product subcategory at the high end of the tablet market where Apple has better prospects for pushing the tablet market forward with a superior experience able to command a premium price, noting:
“By selling a device that is truly designed from the ground-up with content creation in mind, the iPad line can regain a level of relevancy that it has lost over the past few years. In every instance where the iPad is languishing in education and enterprise, a larger iPad with a 12.9-inch, Force Touch-enabled screen would carry more potential. Simply put, the iPad needs to stand out from the iPhone and Macbook. The iPad Air and iPad mini aren’t doing it.”
I agree for the most part, and have indeed been saying much the same thing for years in my ongoing critique as a somewhat frustrated user of iPads as productivity as well as passive consumption machines. I love my iPad Air 2 (except for mediocre battery life), and I wouldn’t want to live without it, but it’s highly compromised as a productivity and content creation platform, completely unable to perform some routine functions (again such as anything requiring file level directory access), and so clunky at performing others due to no mouse support and lack of multitasking and multi-windowing, that it’s ofter easier and more pleasant to just switch back to a Mac. Thing is, though that at the high end of the tablet market Apple will still have to compete with the Surface Pro and other Windows 10 tablet computers.
The enhanced windowing features coming in iOS 9 for the iPad Air 2 and presumably a rumored larger iPad Pro will help, but still pale by comparison with the flexibility and versatility of OS X an Windows 10.
Above Avalon thinks a 12-ish inch iPad model with nearly 80 percent more screen real estate than the iPad Air, dedicated accessories like a smart stylus, and better covers and stands can go a long way toward resolving the iPad dilemma for Apple. Again, I largely agree, although personally I’m not sure I would want a bigger tablet a s opposed to a similar screen size Mac. It would strongly depend on how much of my perennial productivity feature wish list ended up being addressed by Apple in the iPad Pro/Plus.
As for Apple’s push into the enterprise with its MobileFirst partnership with IBM, that hasn’t exactly been setting the world on fire, and the latest associated development has been IBM becoming Apple’s largest MacBook customer. Above Avalon insists that a larger iPad could be positioned as a laptop replacement in contrast to current iPads that live in a “weird place” as secondary computers, and that larger iPads would have greater appeal to traditional business markets like as finance and banking would see a much easier adoption rate if legacy products like Excel were supported and made that much more easier to use (something that comes as a given with Surface and other Windows-based tablets).
Above Avalon suggests that a larger iPad could also be a catalyst to resumption of the trend of replacing old laptops and desktops, becoming a consumer user’s primary computing device, with a 12.9-inch iPad Plus falling into step with the Mac in terms of modest but steady sales growth and an orderly upgrade cycle. However, the author concedes that the operative question would be whether there’s room between an iPad Air and MacBook (not to mention the iPhone 6 Plus in the mix) for a device sharing key characteristics of both. Microsoft’s Surface success might suggest that there is, but it has the advantage of full Windows 10 support. He observes that finding use cases for a larger iPad that are sheltered from other products would enable Apple to reposition the iPad line for a more sustainable path not just for growth, but indeed ultimately the platform’s outright survival in a world where the iPhone is already the all-powerful device that nearly everyone owns, and charting a brighter future for tablet computing than the mediocrity of being relegated to a device for watching Netflix and YouTube.
Personally, I detest watching movies and TV shows on tiny tablet and laptop screens, unless there’s no alternative available, and for me the iPad is a personal computer that I can carry easily and use in venues where even a laptop would be cumbersome, but where a 5.5-inch iPhone 6 Plus is simply too much of a compromise. I hope Apple will finally see fit to address the needs of users like me with the iPad. If not, there’s a lot that’s looking awfully attractive about the Microsoft Surface, especially now that Windows 10 is here.