Winnipeg Free Press - PRINT EDITION

Victim of its own success

Sales for Apple's flashy gadget are down, and one of its 'problems' is that it's lasting too long

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NEW YORK -- THE NUMBERS ARE CLEAR: APPLE IS SELLING FEWER IPADS.

The company reported this month that sales of its sleek, pricey tablet were down 19 per cent from last quarter and nine per cent year-over-year.

CEO Tim Cook tried to reassure investors that Apple's new partnership with IBM to sell its devices to IBM's corporate customers will help make iPads ubiquitous in the workplace.

"This isn't something that worries us," he said of the iPad sales decline. But the numbers are disappointing no matter how you spin them.

This was supposed to be the iPad's time to shine. Greeted with skepticism when Steve Jobs announced it in 2010, the tablet shattered expectations and upended the computer industry. As sales figures grew, pundits began predicting the death of the PC.

Instead, PC sales appear to be stabilizing -- Mac sales are actually growing -- and it's the iPad whose sales are declining. The trend is undeniable.

Is it possible that, at the tender age of 4, the iPad has already passed its peak? Should we brace ourselves for the post-PC crowd to begin proclaiming the death of the tablet?

Not so fast. The truth is that the iPad was never cut out to replace the PC, so we shouldn't be surprised that it hasn't. And, just as the "death of the PC" narrative has been oversold, it's way too early to write off the tablet's future. It's simply time to adjust expectations.

The iPad's sales woes don't mean it's a bad product. Apple customers consistently report satisfaction with their tablets, and the iPad continues to command a dominant share of the market in the face of intensifying competition from Samsung, Microsoft, Amazon and others.

But there are inherent limitations to the device's ubiquity. As great as it is for watching movies on an airplane or checking email over breakfast, it still can't match the power and versatility of a desktop or laptop as a primary workstation. Microsoft is trying to solve that problem with its business-oriented Surface Pro tablets, with mixed results; Apple, at least until the IBM deal, wasn't even trying.

For most people, these limitations consign the iPad to "third-device" status behind the smartphone and the PC. And it shouldn't be surprising that not everyone needs or can afford a third device -- especially one as dear as Apple's. Again, though, this isn't just an Apple problem: The majority of people in the United States and Canada still don't own a tablet.

The second big problem for Apple's tablet sales might be, ironically, the same factor that's holding back sales of PCs: They're too durable.

Experts during the height of the "death of the PC" hand-wringing were overstating their case; PCs weren't dying, but rather living longer. That is, the drop-off in sales reflected a decline in PCs' replacement rate -- the time between the average consumer's computer purchases. Not only are there more gadgets competing for your money, but PCs have gotten so fast and reliable that you don't need to buy a new one that often.

I haven't seen hard data on the replacement rate for iPads, but chances are similar forces are at work.

Cook, the Apple CEO, said in July that more than 50 per cent of iPad buyers are first-time tablet owners. That sounds on its face like good news for the device's future. Given that sales are declining overall, however, it also suggests that the company has yet to see a huge wave of repeat customers. A lot of people are probably still perfectly happy with their second- and third-generation iPads, even as Apple is preparing to launch its sixth.

And that's the way it ought to be. It's not fair for consumers to drop hundreds of dollars on a fancy gadget only to see it become obsolete within two or three years.

It sure is good for business, though -- and no one knows that better than Apple. Just look at the iPhone, which keeps breaking its own sales records even after seven years on the market.

Apple is also presumably readying its usual slate of fresh features for its sixth-generation iPads. But if the company really wants to see its tablet sales spike, maybe it should forget about A8 processors and 8-megapixel cameras. Just find a way to get people to drop their iPads on the ground more often.

-- Slate

Republished from the Winnipeg Free Press print edition August 9, 2014 D11

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