Apple's Sizable Jump in Tablet Sales Wasn't Entirely Driven by New Lower-Priced 9.7-Inch iPad

[Carnegie]

I think most people have missed what is likely the main reason for the YoY increase in iPad unit sales: Channel inventory changes. In other words, the increase in sell-through (if there was one) was likely much less than the reported increase in sell-in.

I think, based on what Apple has and hasn't reported, we have good reasons to believe that's the case. I briefly discussed those reasons in another thread, but I can walk through them here if any are interested.

 

[Rogifan]

I think most people have missed what is likely the main reason for the YoY increase in iPad unit sales: Channel inventory changes. In other words, the increase in sell-through (if there was one) was likely much less than the reported increase in sell-in.

I think, based on what Apple has and hasn't reported, we have good reasons to believe that's the case. I briefly discussed those reasons in another thread, but I can walk through them here if any are interested.

Why do we have to make things so complicated? Apple reports sales. Sales are up YOY, first time in a while. Who cares about channel inventory noise? Maybe it matters to Wall Street sell side analysts but why should it matter to consumers? It’s not like Apple has tons of unsold iPads collecting dust in 3rd party B&M warehouses.

 

[Duckyduckbumps]

I've ordered the same model for similar reasons. The 12.9 is almost impossible to find in Australia at the moment.

For me it's funny to hear people say it's too big and awkward. I'm coming from a 1.6kg tablet PC with a 16:9 screen ratio and much bigger bezels.

I do think that Apple could walk the talk more by bringing their own pro apps to this machine.

For me it was because the iPad Pro finally went, well, 'pro'. Fro, the hardware on the new 2017 models, to the upcoming iOS 11 release; I was more than ready to make an iPad my secondary machine and I have no regrets - 12.9 256GB iPad Pro. Everything from local web development on Coda, photo editing on Affinity Photo, and quick mockups on Adobe Comp, the iPad handles my secondary machine workload next to my iMac and I now have no need for a laptop.

 

[Carnegie]

Why do we have to make things so complicated? Apple reports sales. Sales are up YOY, first time in a while. Who cares about channel inventory noise? Maybe it matters to Wall Street sell side analysts but why should it matter to consumers? It’s not like Apple has tons of unsold iPads collecting dust in 3rd party B&M warehouses.

I suspect it wouldn't matter to most consumers. But if people are trying to figure out why (or speculating as to why) the reported sell-in for this past quarter was substantially better than the year ago quarter, then it would seem that it matters to them why it was better. And, in this case, a big part of the reason why is differences in channel inventory changes.

 

[Naraxus]

It's almost mesmerizing to see Apple slowly checkmating the tablet and wearables markets just like a spider slowly building his web.

Apple's had the tablet market for a while now. I've slowly been coming around to the iPad being a somewhat useful laptop replacement. I'd still like to have a tablet with Mac OS X on it but that'll probably never happen. The iPad is getting more powerful and more useful all the time.

This is a good thing.

 

[MartinAppleGuy]

I've ordered the same model for similar reasons. The 12.9 is almost impossible to find in Australia at the moment.

For me it's funny to hear people say it's too big and awkward. I'm coming from a 1.6kg tablet PC with a 16:9 screen ratio and much bigger bezels.

I do think that Apple could walk the talk more by bringing their own pro apps to this machine.

I was over a two week wait for mine. Definitely worth it!

 

[Regular guy!]

The new iPad Pro 10.5 is awesome, never felt this good since my first iPad 2! I owned 3,Air, Air 2 before.

 

[foobarbaz]

Why do we have to make things so complicated? Apple reports sales. Sales are up YOY, first time in a while. Who cares about channel inventory noise? Maybe it matters to Wall Street sell side analysts but why should it matter to consumers? It’s not like Apple has tons of unsold iPads collecting dust in 3rd party B&M warehouses.

*sigh* Finding out what the truth is is not "making things complicated".

Why should it matter to consumers if Apple is selling fewer iPads? Well, why should it matter to consumers if they're selling *more* of them? You've read the article, haven't you? So you must be interested ... Yet it doesn't matter to you if it's actually correct?

 

[MacBH928]

The only thing surprising here is that Amazon sold a whopping 1.7m Fire Tablets in Q2. I thought this thing was going the way of the FaceBook phone.

 

[Abazigal]

Your post is completely contradictory. The iPad mini never left, it's still exist. So Apple can't "Bring it back". Furthermore, we don't know that Apple won't refresh the Mini in the near future.

I think the iPad mini is pretty much dead. For all intents and purposes, the iPad is the budget iPad that replaces it.

 

[44267547]

I think the iPad mini is pretty much dead. For all intents and purposes, the iPad is the budget iPad that replaces it.

Sadly, you're likely correct. As much as I would like to see Apple continue furthering the iPad mini. It seems that particular form factor and size is fading away

 

[Fletchergull]

Had an iPad mini 4 since launch day, but it's getting slow now and it's a bit small for my current needs. I was looking at possibly getting a 10.5" iPad Pro, but is the 2017 iPad an upgrade over the iPad mini 4? How much better is it? A9 vs A8 etc? A lot of what I've seen suggests they're very closely matched, with the 2017 iPad having a slightly worse screen than the iPad mini 4.

The biggest plus would be ARKIT to be honest... iPad Air 2 and iPad Mini 4 will not support ARKIT as they're A9 and up only... that might not seem to be of big importance right now, but once AR apps start showing up, you'll get why it's important...

 

[bodonnell202]

Had an iPad mini 4 since launch day, but it's getting slow now and it's a bit small for my current needs. I was looking at possibly getting a 10.5" iPad Pro, but is the 2017 iPad an upgrade over the iPad mini 4? How much better is it? A9 vs A8 etc? A lot of what I've seen suggests they're very closely matched, with the 2017 iPad having a slightly worse screen than the iPad mini 4.

It's a mixed bag. The A9 is definitely faster than the A8 so that's an upgrade, but it's a step back from the fully laminated screen that the Mini 4 has and it's thicker as well.

Just curious, what are you finding your Mini 4 is getting slow at? I've also had one since shortly after it launched and honestly to me it feels as snappy today as it did on day one. In fact if anything I feel like iOS 10 improved the performance a bit compared to iOS 9, which is what it shipped with.

 

[manu chao]

I think most people have missed what is likely the main reason for the YoY increase in iPad unit sales: Channel inventory changes. In other words, the increase in sell-through (if there was one) was likely much less than the reported increase in sell-in.

I think, based on what Apple has and hasn't reported, we have good reasons to believe that's the case. I briefly discussed those reasons in another thread, but I can walk through them here if any are interested.

I was thinking along the same lines. iPad revenue is number of units sold times average selling price (or if you want, average selling price is iPad revenue divided by units sold). If two of those variables practically stay the same (ASP, revenue), the third one cannot change much either. It is possible that Apple reports units as units shipped to the retail channels whereas the ASP is based on actual sales.

(Or maybe I misunderstood something or got it wrong, I have not read through the entire thread.)

 

[blackcrayon]

I'm ecstatic that Apple finally made a new budget model that is seemingly compelling people to upgrade from their old units.

Yeah, it's great. I love my 10.5" Pro. But if the new "minimum" popular iPad has an A9 chip with 2GB of RAM in it, that only means good things for what developers are able to target.

 

[rowspaxe]

You have to factor in the iPP 9.7s were heavily discounted after the new iPPs were announced. Those are reflected in last Qs sales too.

got one!

 

[Cheffy Dave]

Apple recently reported sales of 11.4 million iPads in the June quarter, an increase of 15 percent compared to the year-ago quarter. iPad revenue was also up, but only 2 percent year over year, suggesting Apple was selling a lot of new lower-priced 9.7-inch iPads, which start at just $329 in the United States.

A new report by research firm Strategy Analytics, however, argues that isn't entirely the case. Apple's average selling price for iPads remained steady at $435 in the June quarter, down only one dollar from the March quarter.

That doesn't mean the new 9.7-inch iPad, introduced in late March, isn't popular. With a faster A9 chip and brighter Retina display than the iPad Air 2 it replaced, and for less money than even an iPad mini 4, the tablet provides good value with few compromises for customers at the low end.

What it does mean is that more expensive iPad Pro models likely sold well enough to offset the addition of a lower-priced iPad in Apple's tablet lineup. Apple launched new 10.5-inch and 12.9-inch iPad Pro models at its Worldwide Developers Conference, a few weeks before the end of its June quarter.

"It's undeniable that lower pricing on the new iPad helped drive sales throughout the June quarter, but the ASPs tell a slightly different story," said Eric Smith, Senior Analyst at Strategy Analytics, speaking with MacRumors.

"ASPs were steady from last quarter, showing that higher priced iPad Pro models also sold well, even though the new 12.9-inch and 10.5-inch models were out for less than a month in the June quarter," he added.

For historical perspective, the average selling price of iPads has typically been between roughly $415 and $450 since 2015, although it briefly rose to $490 in the year-ago quarter following the launch of the original 9.7-inch iPad Pro.

Wall Street Beat

Apple's sales of 11.4 million iPads far exceeded analyst expectations. The average Wall Street prediction was approximately 9 million iPads sold, according to Wells Fargo, with some analysts predicting as low as 7 million.

Strategy Analytics estimates that Apple took a 26 percent share of the global tablet market in the June quarter, up from 21 percent in the year-ago quarter. iPad remained the world's best selling tablet, ahead of Samsung tablets, which maintained an estimated 13 percent market share in the quarter.

Chinese company Huawei also saw explosive 42 percent growth in the quarter, with an estimated 3.2 million tablet shipments, according to Strategy Analytics. Apple, Huawei, and Amazon were the only tablet makers to experience growth in the quarter, with Samsung, Lenovo, and all other vendors facing declines.

It's worth noting that Apple doesn't disclose iPad sales on a model-by-model basis in its quarterly earnings results.

Given the new 10.5-inch and 12.9-inch iPad Pro models were released towards the end of the June quarter, the tablets should have even more of an impact on Apple's tablet sales in the fourth quarter. Apple's 15 percent increase in iPad sales marked the product category's first unit growth in nearly four years.

Also See: IDC's Worldwide Quarterly Tablet Tracker for June Quarter

Article Link: Apple's Sizable Jump in Tablet Sales Wasn't Entirely Driven by New Lower-Priced 9.7-Inch iPad

 

[Michael Scrip]

Amazon... 1.7 million units

PSA:

The next time you hear "XYZ is the best-selling device on Amazon" take it with a grain of salt.

We often hear about something being the best-selling on Amazon... like the Amazon Fire tablets.

But as we see here... it can mean very little in the grand scheme of things... like the rest of the actual market.

Sorry for the slighty off-topic post... it's just something that has always bugged me. Keep this in mind next time we hear about something being the "best-selling on Amazon"

 

[dampfnudel]

I think the iPad mini is pretty much dead. For all intents and purposes, the iPad is the budget iPad that replaces it.

I wish you were wrong, but it definitely looks that way. Of course, Apple may resurrect it someday, you never know.

 

[Abazigal]

I wish you were wrong, but it definitely looks that way. Of course, Apple may resurrect it someday, you never know.

I believe the rational for killing the iPad mini was that it was cannibalising sales of the larger iPhone. As iPhones get bigger, so too will iPad screen sizes, not smaller.

 

[anthorumor]

Of course the iPad Pro would have pushed it up - the decent model costs as much as a MacBook Air.

 

[Solomani]

Apple's had the tablet market for a while now.

And isn't it odd that so many PC analysts keep reporting that Microsoft's Surface is invincibly successful and ascendant at the expense of stealing Apple's iPad market?
[doublepost=1501830990][/doublepost]

I believe the rational for killing the iPad mini was that it was cannibalising sales of the larger iPhone. As iPhones get bigger, so too will iPad screen sizes, not smaller.

But the iPad Mini can't even make cellular phone calls. So it's a false rationale that is was encroaching on the iPhone Pluses.
[doublepost=1501831553][/doublepost]

The only thing surprising here is that Amazon sold a whopping 1.7m Fire Tablets in Q2. I thought this thing was going the way of the FaceBook phone.

Did they actually sell them? I suspect many were given away or bundled with their one wildly successful product: the Alexa/Echo personal assistant.

 

[576316]

Just curious, what are you finding your Mini 4 is getting slow at?

Well, I'm running iOS 11 and, although it's a beta firmware and will be buggy, iPad mini 4 is clearly starting to struggle especially when multitasking, split screen, app switching. I don't expect these things to improve much before release. New firmware just tends to slow down old devices, that's the way it's always been.

 

[recoil80]

Sadly, you're likely correct. As much as I would like to see Apple continue furthering the iPad mini. It seems that particular form factor and size is fading away

The smaller form factor is the best one for some users, just like the 4'' iPhone. After the 5s they introduced SE so I hope the mini will be updated in the future. The new iPad is cheap enough but is too big, while the mini has a really great form factor if you need to carry it everywhere.

 

[cycomiko]

Having a stable asp doesnt particularly show what model is being purchased to any great degree. Sure the bottom of the range ipad sits at 329, but a very popular sku of the ipad sits at 429. Right around teh ASP.
[doublepost=1501841129][/doublepost]

and laminated display with 600nits. I feel that the 10.5 will be the most popular iPad ever

650$ starting price might say otherwise.
[doublepost=1501841182][/doublepost]

Why do we have to make things so complicated? Apple reports sales. Sales are up YOY, first time in a while. Who cares about channel inventory noise? Maybe it matters to Wall Street sell side analysts but why should it matter to consumers? It’s not like Apple has tons of unsold iPads collecting dust in 3rd party B&M warehouses.

apple sales are not sales.