It turns out the iPad was just too expensive after all

It seems that people love everything about Apple's tablet -- except the price.
Written by Adrian Kingsley-Hughes, Senior Contributing Editor

Video: Apple's new iPad Pro takes baby steps towards the future

One of the biggest complaints I've seen leveled against the iPad is that it was too expensive compared to other tablets, and that the high price was acting as a barrier to sales.

Turns out that was true.

Read also: Apple sold one iPad for every four iPhones over the last quarter | Apple beats Q3 expectations, posts solid Q4 outlook | CNET: iPad vs. iPad Pro vs. iPad Mini 4: Which is right for you?

The iPad is an interesting device. Once seen as possibly the successor to the iPhone, it's one of those devices that burned brightly, but it burned itself out very quickly, going from launch to peak sales in under four years, and ever since then, it's been in steady decline.

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Earlier this year, Apple attempted to resuscitate flagging sales by turning to the older-than-dirt sale trick of cutting prices.

And it looks like it's worked. But at a price.

Sales are up, for sure. Just look at the uptick for the last quarter:

iPad sales
(Image: Apple)​

Problem is, increased sales hasn't done much for revenue or profits. While iPad sales are up 15 percent year on year, revenue only climbed by a measly 2 percent.

Apple Q3 17 earnings

Apple's Q317 earnings (Image: Apple)

Average selling price (ASP) is now $435, while a year ago it stood at $490.

This leads us to a few interesting -- and for Apple, worrying -- observations:

  • People are buying more iPads, but they're buying cheaper iPads
  • The high-end, high-priced iPad Pro is doing little to keep the ASP buoyed
  • While Apple is selling about three iPads for every Mac is sells, Macs are pulling in more revenue than iPads

Education is also playing a big part in keeping the iPad afloat. During yesterday's earnings call, CEO Tim Cook threw out this tidbit:

"iPad is the perfect tool for teaching in new and compelling ways, and our iPad results were especially strong in the US education market, where sales were up 32 percent year over year to over one million units."

From the same call, we find that people who buy iPads actually love the iPad -- so the trick is getting them to buy them. Apple CFO Luca Maestri had this to say:

"NPD indicates that iPad had 55 percent share of the US tablet market in the month of June, including 8 of the 10 best-selling tablets. That's up from 46 percent share a year ago. And among tablets priced over $200, iPad's share was 89 percent. In addition, the most recent survey from 451 Research measured business and consumer satisfaction rates ranging from 95 percent to 99 percent across iPad models. And among those planning to buy tablets, purchase intent for iPad was over 70 percent."

It seems that people love everything about the iPad -- except the price.

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