When Apple CEO Tim Cook takes the stage this Thursday at the company’s Town Hall Auditorium in Cupertino, he will need to convince consumers that iPads are still relevant.
It’s easy to forget that just four years ago, when Apple resurrected tablet computing, the sudden hit threatened to hasten the demise of the PC business and rescue the print media industry. Since 2010, it has sold 225 million units and remains among the fastest consumer electronics sellers of all time.
But by 2014, the global personal computer business has managed to cling on to life during a corporate replacement cycle and, to the shock of no one, the print business continues a death spiral — iPad sales notwithstanding. Its blockbuster sales growth began to level as early as last year, with sales off 9 percent in the most recent quarter ending in June. Consumers aren’t replacing their tablets as often as they do their iPhones, whose latest version broke weekend sales records when it became available last month.
Cook will need to explain how Apple recovers from what he has characterized to Re/code‘s Walt Mossberg as a temporary setback. “We couldn’t be happier with how we’ve done with the first four years of the iPad,” Cook said earlier. “I’d call what’s going on recently a speed bump, and I’ve seen that in every category.”
He will need to articulate the iPad’s place in a product lineup that now includes big-screen iPhones. The slump in sales across the tablet sector has been blamed on the accelerating popularity of tablet-phone hybrids such as the Samsung’s Galaxy Note series of devices.
The holiday quarter will be the first indication whether a slimmer, quicker, higher-resolution version of the iPad will reverse the decline in sales or if the cannibalization of the tablet industry by giant-screen smartphones will continue unabated. Another feature expected to grace the latest generation of tablets is Apple’s Touch ID fingerprint sensor for logging in and making purchases.
Perhaps Apple’s best hope for a rebound in tablet sales will come from the courtship of businesses and the education market. It has cultivated schools and universities since the PC era. More recently, it struck a partnership with IBM to stage a swifter incursion into the enterprise.
However, a larger 12.9-inch iPad — one that would likely appeal to corporate customers — won’t arrive until next year, according to Strategy Analytics analyst Peter King, who has contacts in the manufacturing supply chain.
Cook also is expected to offer more details about the launch of Apple Pay, the company’s foray into mobile payments.
Apple announced it had incorporated near field communications technology in its iPhone 6 smartphones and the forthcoming Apple Watch, clearing the way for consumers to make secure purchases without breaking out their wallets.
A number of major banks, credit card companies and retailers have already embraced Apple Pay — including MasterCard and Visa, Bank of America and Chase, as well as Bloomingdale’s, Macy’s, McDonald’s, Subway and Walgreens. Apple Pay is expected to work at some 220,000 stores around the country where this form of wireless payment has been enabled.
Apple is capitalizing on existing technology standards and groundwork laid three years ago by Google, when it introduced Google Wallet in partnership with some of the same players. It’s also aided by a shift in liability that takes effect in October 2015, one that leaves retailers picking up the tab for fraud if they fail to install more secure terminals.
Transactions are something Apple and its partners will need to execute flawlessly, without any embarrassing glitches like the recent update to its iOS 8 mobile operating system that briefly disconnected about 40,000 iPhone 6 and iPhone 6 Plus users from their mobile networks.
Other news expected during the event is an update of the iMac computer and the consumer availability of the OS X Yosemite computer operating system that it previewed in June at Apple’s Worldwide Developers Conference in San Francisco.