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Apple Inc. (NASDAQ:AAPL) iPad Sales Falling, But Cook Sees It Vital For Ecosystem

Apple Inc. (AAPL) iPad Pro

Apple Inc. CEO Tim Cook was surprised when no one asked anything on the iPad during the quarterly earnings call. “Nobody is asking about iPad on the call,” Cook said. This shows that the investors are not interested in the iPad as it is not contributing much to the growth.

iPad still important to Apple

Apple iPad sales were $4.3bn, down by 20% on YoY basis. On the other hand, Mac sales increased to post record revenue of $6.9bn. Despite depressing sales, Cook believes that the iPad has a lot of importance in Apple’s ecosystem.

Apple Inc. (AAPL) iPad Pro

Cook said the device has the potential of attracting a large number of first-time Apple customers, most importantly in the emerging markets. Citing China’s example, Cook said 40% of the iPad customers there had never owned an Apple product before. And, it was the first tablet for 68% of the iPad buyers in China.

Apple Inc. is seen boasting about the stickiness of its platform more than often, saying users not only stick to its hardware for future upgrades, but also buy other Apple devices such as the iPhone and Mac. Services such as the iTunes, App Store, Apple Music, iCloud, and many others help to make the customers stick to Apple products.

On Tuesday, Luca Maestri, Apple’s CFO citing ChangeWave statistics said customer satisfaction for the iPad Air 2 was 97% while among the corporate buyers’ it was 95%. In terms of purchase intent and existing usage, the iPad dominates the rivals. For tablets priced higher than $200, iPad holds 73% share in the U.S. market, Maestri said.

Macs slowly catching the iPad sales

Despite the weak computer market, Apple sold a record 5.7m Macs in the quarter, higher by a million than the units sold in the last quarter, Cook said on Oct. 27. On the other hand, iPad dropped to their lowest since June 2011, and the firm sold just 9.8m units in the last quarter.

Apple Inc. iPad sales are higher than the Mac sales, but its computer sales is slowly moving towards the tablet sales. For the past few years, there has been a spike in the iPad sales each holiday quarter, and whether the trend will continue this quarter also, will be interesting to see.

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Aman is MBA (Finance) with an experience on both marketing and Finance side. He has work as a Risk Analyst for AIR Worldwide, and is currently leading VeRa FinServ, a Financial Research firm. Favorite pastimes include watching science fiction movies, playing PC games and cricket.

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