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by Jason Snell & Dan Moren

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By Jason Snell

The iPad keeps frowning

Last week I wondered if this might be the quarter where the iPad turned its frown upside-down.

Welp.

The only Apple product that didn’t seem to set sales records in Apple’s latest quarterly financial results was the iPad.

Here are the iPad sales numbers in millions for the last four holiday quarters: 26, 21, 16, 13. Apple sold half as many iPads for the 2016 holiday quarter as it did in 2013.

Meanwhile, average selling price sagged, after a brief buoying caused by the release of the 9.7-inch iPad Pro—a sign that during this sluggish holiday period, iPad sales were largely comprised of older, cheaper models.

The iPad has 85 percent of the market of tablets priced over $200. The important facts here: Apple’s not interested in selling a sub-$200 iPad, and so that means it’s doing spectacularly well in the market. The market’s just contracting. So this isn’t necessarily about the rejection of the iPad—it could be about flagging enthusiasm for the entire category of premium tablets.

Apple CEO Tim Cook, famously bullish on the iPad, had a few explanations (or excuses, depending on your level of charity) at the ready when he was asked about the iPad at the very end of his conference call with financial analysts.

Among them:

  • A year ago Apple stuffed 900,000 iPads into the channel (those new iPad Pro models, for example), while this year it removed 700,000 iPads from the channel. That has a 1.6 million unit swing, so Apple would argue that the numbers aren’t quite as bad as they seem. (It would still be a drop if you factored out inventory, but less of one.) This may indicate that Apple’s drawing down inventory because there are new iPads in the pipeline. It might also just indicate that Apple’s got a glut of iPads that aren’t selling.

  • Apple misunderstood iPad demand for the holiday quarter, which, compounded with a shortage from one of its suppliers, meant that it couldn’t ship as many new iPads as it could have.

  • The number of people buying the iPad for the first time is very strong, according to Cook, which means that the tablet market isn’t actually saturated.

  • Customer satisfaction scores are “through the roof”, which means that people who do buy iPads love them. On iPad Pro, Cook said, the customer-sat number is 99 percent. “It’s stunning,” he said.

Still, to find positive things to say about the iPad, Cook had to “zoom out of the 90-day clock” of quarterly results and try to get us all to see the forest for the trees.

“We have exciting things coming on iPad,” he said. “I still feel very optimistic on where we can take the product… so I see a lot of good things and hope for better results.”

Looking and hoping for positive signs. It feels like we’ve been doing that for a couple of years now. It’s probably going to take a major push from Apple—new hardware and improved software—to give the iPad a chance of seeing some turnaround. I hope it happens soon.

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