Apple for probably the first time in many years is experiencing a drop in sales of one of its prime products – the iPad. Data suggests that the drop in iPad sales is to the extent of 12%. This drop is all the more of concern for Apple given the fact that the tablet market is growing, though by not as much as it did in the period 2011-2013. The growth this year of the tablet market has been over 7% and its competitor Google has been able to capture a larger market share selling tablets running on the Android platform.
Stagnant Tablet Market Not Helping Matters For Apple
It has to be admitted though that the falling market demand for tablets as opposed to earlier years has also played its part. The product cycle times are much longer now and consumers no longer are seeking immediate replacements. Today, consumers are not buying new tablets after a year as it was forecasted and that is hurting Apple big time.
In contrast, Google has benefitted with its Android platform mainly because of competitive pricing. The innovation has been better with bigger and sharper screen images as well as resolution coupled with lower pricing dominating the consumer mind. Costs have been driven down and you can buy an Android tablet at less than $100.
Tablets – Not The First Choice Anymore
You must also remember that for the consumer, the smart phone is the first choice. When he or she does decide to go for that second piece of hardware, pricing becomes an important parameter and that is where Apple appears to have lost out. Consumers would prefer a less than $100 tablet to an expensive Apple iPad, since they are only looking for something functional to go with their already expensive smart phone buy.
Apple’ strategy of selling products with high margins seems to have back fired when it comes to tablets. Consumers are not very keen on high end products especially when they have an alternative that is from an equally recognized and respectable brand like Google.
Apple Stayed The Course With iPhone
In the past when its iPhone market got threatened by Google with a similar strategy of going for quick market share over margins, Apple did not budge and stayed its course. It did not bring down the prices and succeeded in differentiating the iPhone from others in the market. It made the iPhone an aspirational item that everybody wanted to possess once they could afford it.
It can do the same with the iPad as well but the problem it faces here is of technology obsolescence. It does not have anything radically new to offer consumers who are happy with the purchase they made last year and will not be buying into just another tablet version, even if it is from Apple. The tablet market is indeed saturated and that is something Apple would have to contend with for the moment.