Apple’s iPad: The 'Magical Device’ Not Making Worthy Sales

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TracBeam Sues Apple
TracBeam Sues Apple Reuters

In the previous month, Apple has posted better than expected profits, revenues and margins with its iPhones. It had 43.7 million sales as compared to the 38 million anticipated by analysts.

The company also reported a 5 percent rise in Mac unit sales when the overall PC market struggled. Apple CEO Tim Cook also boasted the amount of cash returned to shareholders by $30 billion to $130 billion stressing to have attracted more investors.

But there is a red line in one of its products that is shaking the balance sheet. Apple's "magical" device, iPad, may be losing its business in the market share.

According to the research firm IDC, iPad tripped to less than a third of all tablet devices sold in Q1 2014. A year earlier, Apple's iPad was more than 40 percent of all tablets sold. Currently, iPad's market share declined by 19.1 percent across the year.

iPad is Apple's second biggest money maker after the iPhone and accounts for about a fifth of sales. Most tablet makers like Samsung would be happy with this kinds of sales. But it's painful for Apple as the company that revolutionized tablets in the market.

Presently, report said Samsung dominates the market with an increase in its market share by nearly five points and took 22.3 percent of the tablet market. The other brands are not selling as much as Samsung. Apple almost lost its customers and a huge share in the market.

Samsung sells more different types of tablets than Apple does but owning rights is the most important thing. The fall of iPad isn't a surprise. iPad sales have been erratic over the past several quarters with tougher competition and market saturation.

Apple posted its biggest period ever in the holiday quarter with sales of 26 million iPads. But that's one of only two quarters out of the past five that iPad demand rose.

At Q1, iPad sales were far below expectations, it simply scored 16.4 million units or 16.1 percent down. Apple's iPad business has been declining since a very long time and not because of any seasonal post-Christmas dip.

Shipments of the tablet, including the larger screen iPad and iPad mini, have averaged a quarterly decline of 4 percent from 38.2 percent market share to 33.8 percent, year over year since June 2013 quarter.

Cook, speaking to the analysts on the earnings of iPad, said there was some sort of technical account issue to do with inventory levels in the sales channel which means its either placed in stores or in trucks.

He added high customer satisfaction levels, high numbers of people planning to buy an iPad and the availability of Microsoft Office on the iPad make him confident in the rise of tablet sales.

iPad remains to be at the top in category prospects. It's generally priced higher than any tablet in the market. But even after adjusting for inventory differences, iPad sales still declined more than 3 percent.

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