Yahoo Finance Apple CEO Tim Cook optimistic about iPad’s future
Apple valuation: $700 billion and counting (Part 5 of 13)
Apple iPad sales decline by ~18% in the holiday quarter
In the previous part of this series, we covered the overall tablet market decline in 4Q14. It seems that major players Apple (AAPL) and Samsung, as well as smaller players such as Amazon (AMZN), all saw a decline in tablet sales. During the 1Q15 earnings call, Apple CEO Tim Cook acknowledged the decline in iPad sales. As the chart below shows, iPad sales declined from 26.0 million to 21.4 million in the holiday quarters of 2013 and 2014.
Meanwhile, he blamed this decline on the tendency of people to hold on to iPads for a long time, which has led to a longer upgrade cycle . He also suggested there might be some cannibalization happening by Mac on one side and iPhone on the other.
Another problem with the iPad business is that Apple has not launched a revolutionary new version for a long time. A few months ago, Apple did launch the upgraded iPad Air 2 and the iPad Mini 3 , but these were minor updates at best.
Apple optimistic about iPad’s prospects in enterprise market
CEO Tim Cook is optimistic about iPad’s prospects from a long-term point of view. He specifically mentioned Apple’s partnership with IBM (IBM) and said he expects the collaboration to bear fruit over the long term. He did acknowledge that currently, although Apple is present at all of the Fortune 500 companies, the companies aren’t deploying iPads to a large number of employees. But to resolve this issue, Apple is looking to build enterprise-specific apps in partnership with IBM. We discussed this in Part 2 of the series.
Another reason for Apple to be optimistic about the enterprise market is the complete support from Microsoft (MSFT). Recently, Microsoft released its Outlook client on iOS. This provides iPhone and iPad users the complete functionality of email, calendar, and contacts. Early last year, Microsoft also launched its Office app for iPad .
Apple makes about 16% of the Sector SPDR Trust SBI Interest (XLK), making it the ETF’s top holding.
Browse this series on Market Realist:
