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New iPads or Not? iPad Revenue Predicted to Sharply Drop in Q4 2023

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Apple's quarterly iPad revenue will significantly decline in the fourth quarter of 2023 on a year-over-year basis, according to estimated figures shared today by Erik Woodring, an analyst at investment firm Morgan Stanley.

iPad-mini-and-Air-Feature-2.jpg

Morgan Stanley estimates that Apple will report iPad revenue of $7.2 billion in the fourth quarter of 2023, which would be a decline of approximately 23% compared to the $9.4 billion that Apple reported for the segment in the year-ago quarter.

The year-ago quarter will be a tough comparison for iPad revenue, according to Morgan Stanley, as Apple announced updated iPad Pro models and the 10th-generation iPad last October. Over the weekend, two reports indicated that Apple plans to announce updated iPad Air, iPad mini, and entry-level iPad models this week, although some credible sources like Bloomberg's Mark Gurman have cast doubt on this rumor.

It's unclear if Morgan Stanley expects new iPads to launch this month, but given the firm expects iPad revenue to significantly decline this quarter, the firm is at least not expecting any iPad updates that are major enough for revenue growth. Only minor changes are expected for the next iPad Air, iPad mini, and entry-level iPad whenever the devices are released, including an M2 chip for the iPad Air and an A16 Bionic chip for the iPad mini.

There are also rumors of a third-generation Apple Pencil with interchangeable magnetic tips for drawing, technical drawing, and digital painting.

Apple has yet to release any new iPads this year. If that trend continues for the remainder of 2023, it would be the first calendar year with no new iPads released in the device's 13-year history. The two reports expecting new iPad models this week said Apple's announcement would likely be on Tuesday, so we'll see what happens tomorrow.

Article Link: New iPads or Not? iPad Revenue Predicted to Sharply Drop in Q4 2023
 
Article Link
https://www.macrumors.com/2023/10/16/ipad-revenue-to-decline-in-q4-2023-morgan-stanley/
Either an announcement this week and availability next week or announcement next week and availability the following week... October 24 is the tentative release date of iOS 17.1 and iPadOS 17.1

I just wish that an iPad mini 7 gets announced/released so the price of iPad mini 5 will be much lower... [I still prefer the classic design]
 
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Maigrais said:
That’s because today smartphones are very advanced with bigger displays and robust battery life. Since M1 chip, MacBook Pro 💻 are now impeccable systems with even greater battery life. iPad is left squeezed both sides.
Click to expand...
Agreed. Only a matter of time before tablets get cannibalized by phones on the low-end and PC's / Macs on the high-end. @Mr. Dee
 
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Even if we had new iPads their revenue would drop anyhow. Higher end iPads have become redundant outside of use for artists and most just buy an iPad and hold onto it for five years or longer. Not to mention the fact iPadOS updates are all just sloppy seconds of the previous iOS update every year, so why even get an iPad anymore when Apple's treating owners like second class citizens versus the iPhone and Mac?

Guts of a Mac, but does a lot less than a Mac, and is more expensive than a Mac. At that point, JUST BUY A MAC. And many agree as the Mac has been making more revenue than the iPad.

Lol.PNG
Lmao.PNG
 
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So Apple made a significant change to one of its iPad models last year… A change highly requested - moving the front facing camera to the top of the device in landscape mode. I assumed this change would roll out across the line within a year - now, a year later, no one has any idea if landscape front camera is coming to iPad Air/Pro?
 
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Love to see iPad mini update. If this does not happen this year, it must be a reasonable business decision for Apple. So, whatever will be, will be 😊.
 
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Apple sells fewer units these days at a higher price and fatter margins. This strategy has been keeping iPad revenue basically flat for a decade. Now they're looking at prospects of fewer units at the same prices.

I don't know Apple, perhaps eat it on the margins and sell more units in an attempt to get much higher revenues and still more income, and continue encouraging Apple services cross-selling? I really won't be surprised if sales decline on higher storage iPhones and Macs also. Customers are fed up with paying 1000%+ markup on storage.

If I'm paying $1500+ for a 2023 personal device with a screen, it will be extremely portable...or a fully functional Macbook or macbook pro w/ a real OS.
 
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Which is why a new Apple Pencil 3rd gen that's only compatible with M2 iPads Pro and new (spec bumped) 6th gen iPad Air and 7th gen iPad mini makes perfect sense.

Very low cost in r&d for Apple but a big boost in sales for Q4 2023.

Then M3 iPads Pro drop in early Q2 2024 and iPad sales are trending upwards again.
 
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Mr. Dee said:
Because the iPad is a consumption device primarily that people keep for a very long time even when they stop getting updates. Apple sees this.
Click to expand...
True but the iPad is a mature device. There's only so much you can do with a tablet when it comes to the hardware. I'm not saying Apple needs to run macOS on the iPad but a more robust OS tailored to just the iPad might make the device more appealing other than as a consumption device which is primarily what they are used for. I have been buying iPad's since the iPad 2 and it's basically the same experience for me 12 years later.
 
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Morgan Stanley analysts are wrong 50% of the time.

Finance bros need to lay off the Coca Cola in the bathroom

Procreate Dreams is coming in November.

Anyone who is into animation and special effects who doesn't have an iPad will 100% be getting an iPad to run Procreate Dreams.

I have never been as sure of something before. This is 100% going to happen.
 
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now i see it said:
Marketing Director: “Tim, our iPads are lasting too long. Customers aren’t purchasing them as often. Sales are down.”

Tim: “We can fix that.”
Click to expand...
Incentivizing more frequent upgrades is really as simple as putting out a new much superior Apple Pencil 3rd Gen. and (arbitrarily) limiting it to only be compatible with Bluetooth 5.3 iPads.

Buyers then have the choice to go for an M2 iPad Pro or the new spec bumped Air or mini that will drop at the same Apple Pencil 3rd Gen. announcement.

A good chunk will jump the gun at this announcement to get the new Pencil now. The rest will follow when Apple eventually drops the M3 iPads Pro in early Q2 2024.

It's very simple.

I bet Apple is also collaborating with ProCreate to showcase the much hyped ProCreate Dreams app at the Pencil 3 announcement. Would be a lost opportunity if not.
 
Mr. Dee said:
Because the iPad is a consumption device primarily that people keep for a very long time even when they stop getting updates. Apple sees this.
Click to expand...
Yep! In our house, the Macs and iPhones are generally no more than 3 years old or so. They're in use constantly. The iPad? It's a Mini 4, something like 8 years old, and it just serves as a floater device. It takes a minute to navigate to queue up a video or bring up a recipe, but it's not the end of the world. I could see updating in in the next year or so, but then it would probably be another 5 years after that before we'd consider another one.
 
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At some point technology plateaus and each new model offers less and less reasons to upgrade. Then you eventually saturate the market and they do not get new sales once the pipeline is filled with customers owning ipads that are good enough.

This is when perpetually growing profits stops and now shenanigans are needed to pump the stock price.
 
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Spaceboi Scaphandre said:
Even if we had new iPads their revenue would drop anyhow. Higher end iPads have become redundant outside of use for artists and most just buy an iPad and hold onto it for five years or longer. Not to mention the fact iPadOS updates are all just sloppy seconds of the previous iOS update every year, so why even get an iPad anymore when Apple's treating owners like second class citizens versus the iPhone and Mac?

Guts of a Mac, but does a lot less than a Mac, and is more expensive than a Mac. At that point, JUST BUY A MAC. And many agree as the Mac has been making more revenue than the iPad.
Click to expand...
Whole heartedly agree and why I ended up trading in my 12.9 Pro for a MBA M1: it is just a more capable environment to run the apps I need, in a package that ends up being about the same weight as my iPad + Keyboard (smart folio).
 
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NEPOBABY said:
Morgan Stanley analysts are wrong 50% of the time.

Finance bros need to lay off the Coca Cola in the bathroom

Procreate Dreams is coming in November.

Anyone who is into animation and special effects who doesn't have an iPad will 100% be getting an iPad to run Procreate Dreams.

I have never been as sure of something before. This is 100% going to happen.
Click to expand...
I agree that Procreate Dreams is going to open up a new market for the iPad. I for one am excited to see how this works out.
 
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