Before Apple’s stock price soared to even greater heights this week thanks to strong iPhone sales, growing services revenues, and rumors of spectacular devices to come, we got the bad news about iPad sales. During Apple’s quarterly sales call two weeks ago, we learned that sales were down 19% percent and revenue down 22% over last Q1, meaning not even the impressive iPad Pros have been able to overcome the forces of market saturation, slow upgrade cycles, and the encroachment of large screen smartphones.
Tim Cook keeps telling us that Apple remains committed to the platform, and to their credit, Apple has kept adding form factors and features to the lineup (and we hear more are on the way). However, the iPad’s glory days seem a distant memory, and it is now clearly a secondary device to the company’s true money maker- the iPhone.
It’s Tough Out There for a Tablet
What we tend to forget is that, while iPad sales are down, at least there ARE sales. Things are a whole lot worse for everyone else making tablets. Maybe I should have called this article, The Challenging State of THE REST of the Tablet Market. Remember the days when BestBuy had a double isle devoted to Android and Windows tablets from companies like Lenovo, Asus, Acer and Toshiba? Remember the Nexus 7?
I do. I actually owned both models, and really liked the second one. I hate that Google got bored and abandoned the form factor, because they have the clout to sell more than any of the aforementioned manufacturers.
Sadly, those days and devices are long gone. What’s the point of a tablet isle at BestBuy when there’s little left worth putting there. The Microsoft Surface (which we will get to in a moment) and Amazon’s tablets get their own areas, along with Apple of course. Samsung has a large section in many stores, and they may have a couple of tablets on hand, but the majority of display space is reserved for Galaxy phones and wearable devices. The only other thing I could find during my last visit to BestBuy was a small section of a shelf labeled “Value Tablets.” They were all BestBuy’s house label, Insignia. Blech.
Many of the companies mentioned above still make tablets, but if you look through their offerings, they usually revolve around smaller screen sizes and cheaper prices. At this point, Samsung and Amazon are the only companies making larger screen tablets with features that come anywhere close to the iPad, but gone are the days when they actually tried to compete with it. For all their size and money, even they still primarily focus on the 6″ to 8″ sizes. So don’t feel too badly for Apple.
When is a Tablet Not a Tablet?
So what about the Microsoft Surface? It’s gone from the butt of jokes and being called an iPad on NFL broadcasts to a mature device that has the respect of the tech community. The devices in the Surface lineup may not be a massive mainstream sales successes, but they have gained enough mindshare to be viewed as equal to or better than the iPad by many, especially enterprise users. However, is the Surface really the same kind of device as the iPad? Personally, no matter how it is designated, I don’t think it is.
I’m a Windows user, and I currently use a Lenovo Yoga Pro 2, which other than the detachable keyboard, is a similar device to the Surface in many respects.
It is touch enabled, thin, light, and has a flexible design that allows it to be used in different ways. However, like the Surface, it is NOT a tablet. Not in the truest sense. It is a laptop made to be more portable and to work better with touch. More importantly, where the iPad is a device that was built from the ground up to work using touch input running an OS built to focus on touch, the Surface is based around an OS that still sits straddled between the future and the past, and for which touch is still a secondary form of input. A removable keyboard and built-in kickstand don’t adequately cover over that in my book.
Now, don’t misunderstand me. I don’t really use any of the “tablet” features of my Yoga, but I love it as a laptop. I use it all day, every day at work, and rarely have a complaint. I also still have my 4 year old original Yoga as a backup machine. It still boots up in less than 10 seconds and works very well. The only reason I moved on as soon as I did was because it had a smallish 128 GB SSD. The thing is, at 13″, neither is a great tablet with the screen folded back with the keyboard on the bottom, running mostly desktop apps. Like my iPad Pro, it is very good at performing the tasks it was designed around, but is less ideal for things that fall outside of that scope. It will still work for them, just not as well.
So, while Microsoft has definitely established itself as a force in portable touch computing, I still wouldn’t classify the Surface in the same category as the iPad. There is overlap between the two, especially with the iPad Pros, but there are still more differences than similarities at the OS level, where it counts. However, those differences do cut both ways. Whether the Surface is really the same as an iPad, it’s more traditional OS does give it advantages, especially in the business and enterprise markets. Companies don’t have to re-imagine interfaces and redesign workflows to roll out the Surface in their organizations like they often to with the iPad and iOS.
However, you view Apple and Microsoft and their devices, one thing is true. The iPad and Surface have combined to cover the touch market and squeeze the competition hard. I wouldn’t expect to see much marketing and innovation beyond larger competitors like Amazon, Samsung, and Google. They can afford to stay in the game, where it just won’t be worth it for most companies. But at this point, it will be hard for any of them to make a big move against them.
What does the future hold for the iPad and that tablet market as a whole? It seems there is a lot of uncertainty surrounding the future of the product category right now. Maybe Google will get back in the game with something similar to the Nexus 7. It’s worth it to Amazon to stick around and at least tread water in the tablet game, because their Fire devices serve as a gateway to online sales and their services, so they likely aren’t going anywhere. Samsung is large enough that they can afford to produce tablets that don’t move in massive quantities. They seem to be focused on having a broad portfolio of devices that cover all shapes, sizes and price points, and keeping a full compliment of tablets fits with that philosophy.
Barring a sizemic shift in the technologies that go into tablets, it’s going to be VERY difficult for anyone else to gain enough traction in this market to be worth jumping into it. However, one interesting outside player who could shake things up a bit is Nintendo.
While their focus is obviously squarely on gaming, there could be enough crossover with the portable/home gaming console hybrid Switch to draw some gaming-focused tablet users away. It will certainly be interesting to see if they can make headway taking the same approach as Microsoft and coming at the market from a different direction.
Whatever the future brings, there is no doubt that the tablet market is a far different challenge today than it was from 2010-2013. It’s hard to say whether something or someone can re-invigorate sales, or if tablets are going the way of the PC, with a glacial pace of innovation and long upgrade cycles. However, this much is clear at the moment- when it comes to touch-enabled devices, it’s Apple and Microsoft and everyone else, and it is hard to imagine that changing any time soon. With the market virtually all to themselves, can they generate the sales and profits it will take to support the R&D necessary to keep the category moving forward.
What do you think about the state of the tablet market? Will sales bounce back, or continue to be erratic? Will Apple’s iPad Pro eventually stoke the fires again? I would love to hear your thoughts in the Comments section below, on Flipboard, or on Twitter @iPadInsightBlog or @jhrogersii.