7-Inch Tablets Are Hurting iPad Sales
Is it surprising that the increasing popularity of 7-inch tablets, including the iPad mini, is hurting the sales of Apple’s full-sized iPad?
According to a research note published yesterday by Citi’s Apple analyst, the Cupertino-based company is experiencing a dramatic slowdown of its 9.7-inch iPad business.
In the fourth quarter 2012, 9.7-inch iPad sales were almost flat, increasing only 1.8 percent year-over-year.
In the United States and Japan, sales of Apple’s flagship tablets even declined by 9 and 26 percent, respectively.
This unexpected quick slowdown has been blamed on two possible reasons:
#1 Markets such as the U.S. and Japan might be reaching saturation levels. However, understanding that the iPad, compared to the iPhone, can’t be updated with a newer model with the renewal of a service contract every two years. This would certainly address a portion of the slowdown in sales.
#2 What is considered a more likely factor, is that the smaller (and less expensive) tablets are now offering a “good enough” experience for users at a more affordable price thereby taking a large portion of the sales market. Not surprisingly then, Amazon’s Kindle, Apple’s own mini iPad and Google’s Nexus 7 are reporting consistent sales.
To quote Steve Jobs’ “If you don’t cannibalize yourself, someone else will”.
With competition coming on strong, it was a smart move by Apple to introduce a mini iPad. This holds true even against the fact that the mini iPad is taking away sales from the larger iPad, it is keeping customers at Apple.
Today’s chart by Statista shows the growth of Apple’s 9.7-inch iPad sales as estimated by Citi analysts based on IDC data.