Market saturation is not the reason behind the fall in iPad sales

Market saturation is not the reason behind the fall in iPad sales

Summary: Can the iPad have hit market saturation after three years and 155 million units? I doubt it.

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TOPICS: Apple, iPad
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Sales of the iPad took an unexpected tumble last quarter (Q3 13), with shipments falling by 5.4 million compared to the year-ago quarter. This has led some to believe that the market for Apple's slate has become saturated in a little over three years.

Christopher Mims and Richie King of Quartz throw at lot of pretty charts and numbers at readers in an attempt to convince them that the iPad market is saturated.

Rather, it seems that the overall market for tablets is beginning to saturate, leading to slowing sales of the iPad. Pew recently found that 34% of American adults now own a tablet, with even higher penetration among households earning $75,000 or more (56%) and college graduates (49%). It’s certainly possible that the drop in iPad sales is due to cannibalization by Android tablets—which now have almost the same global market share as iPads and are shipping in greater numbers each quarter—but many of those tablets are of the cheaper, lower-end variety.

But the charts and infographics aren't convincing me for a number of reasons.

First, here's a chart showing a saturated market. It shows iPod sales, a product that has ben on the market for over a decade. Everyone who wants one already has three.

This is a saturated market.

Apple has sold almost 400 million iPhones, and that market is still going strong, so it is a little hard to imagine that after three years and 155 million sold that the iPad is juggernaut has hit the buffers.

Then there are the sales themselves. Shipping 14.6 million iPads in a quarter is not shabby by any means. It took Apple 15 quarters (between Q3 07 and Q1 11) before it managed to shift this many iPhones in a quarter. On top of that, despite a fall in sales the last quarter was still Apple's fifth best quarter for the iPad (behind Q1 13, Q2 13, Q3 12, and Q1 12).

Then there's the 40 million iPads that Apple managed to shift during Q1 13 and Q2 13. Over the two quarter following the release of a new iPad and the iPad Mini, Apple shifted almost a third of all the iPads sold so far. High demand following the release of a new product invariably leads to a fall off in demand. This, in my opinion, is the most likely reason why iPad sales fell so dramatically. 

There are similar patterns present in the iPhone sales data.

Finally, what about all the new territories that Apple is expanding into, such as China. These markets are fresh, and about as far away from saturation as you can get.

Topics: Apple, iPad

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51 comments
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  • Apple's China Sales Aren't All That Hot Either

    Note the other similarity between the patterns of IPad and IPod sales: the falloff is happening year-on-year.
    ldo17
    • No sale #s can go up forever

      These companies act as if people have endless money to spend on these device. They don't. Saturate it will.
      LBiege
      • Re: No sale #s can go up forever

        Android tablet sales are still increasing, Apple's are not. Is that "saturation", or just "competition"?
        ldo17
        • The entire mobile sector will get hit by the slowing economy

          People have overspent and are outta income now. The entire Western economy will go Detroit. Just sit tight and watch.
          LBiege
          • Death

            Death of the Tablet already!?! I thought we were just coming to terms with the death of the PC.
            NathanDrake
          • We are now in Post-PC-Post-Tablet times

            I'm betting on Apple to deliver the iTelegraph.
            A Gray
        • Surprises abound

          A group of companies that can target different markets and price points better than a single company can happen to get more sales too.
          Michael Alan Goff
    • About that Chinese market

      An iPad costs about half my weekly salary (and I can't afford one). It costs more than the monthly salary of the average Chinese family. I understand they like to eat and wear clothes over there...I don't see iPads grabbing 1/3 of the population there at current price-gouging levels.
      jvitous
  • Oh well...

    When IPAD sales falls, its market saturation, when PC growth stalls, it’s a Windows 8 problem and Post-PC and Windows is becoming irrelevant... Excellent logic !!!
    OwlllllllNet
    • No your right...

      It’s an Apple problem and Post-PC and iOS is becoming irrelevant too.

      Android and low cost boards have effected Apple like Epson printers did to HP and Cannon. They've only saturated markets where people will pay too much for less.
      Socratesfoot
      • Please enlighten

        Is English your first language, or are you American, or...?
        ego.sum.stig
    • Spam filter

      What the heck is wrong with this site's SPAM filter? I can't post anything without getting the "Your comment contains words or phrases associated with spam and will not appear on the site until it has been checked by a moderator."
      x I'm tc
      • I've notcied that, too.

        The sites filters are seriously messed up. Sometimes you try and just post a "test" message and it gets flagged. Haven't tried clearing cookies yet. That might help. Or maybe they're just blacklisting whole blocks of IP addresses. It's a mystery.
        dsf3g
  • Heins was right

    Maybe BBRY CEO Heins was right. In 5 years, tablets will be obsolete. Who wants to replace one every year or two?
    Just to get some super high res screen that your eyes don't notice unless you are looking at the screen rather than the actual content?
    Susan Antony
  • Irony

    "Christopher Mims and Richie King of Quartz throw at lot of pretty charts and numbers at readers in an attempt to convince them that the iPad market is saturated."

    Just like you are throwing a lot of pretty charts and numbers at readers in an attempt to convince them that ipad sales didn't fall.

    They did.

    By a lot.

    And this is after apple ADMITS that it stuffs channels and then counts them as sales.

    apple is irrelevant. We are in the Post-ipad era. Couldn't happen to a more heinous offender of anti-trust regulations.
    toddbottom3
    • What do you say about MS?

      "apple is irrelevant. We are in the Post-ipad era. Couldn't happen to a more heinous offender of anti-trust regulation"

      The most fragrant violator. The one who was convicted in court.
      itguy10
      • This is about apple

        You know, the fragrant violator of anti-trust regulations. The one who was convicted in court. The one who is irrelevant.
        toddbottom3
        • What makes them irrelevant?

          And who is relevant than, if Apple is not?
          yoshipod
          • Still Waiting for an answer

            I answered your question last week, why don't you answer mine?

            You have posted other things since then.
            yoshipod
          • I'll use the same logic used elsewhere

            "A company is no longer relevant when their stock price is below peak, their profits are below peak, and the sales of their leading tablets are below peak."

            That fits apple.
            toddbottom3