The iPad Upgrade Cycle Is More Like Computer Than Phone
Last week we got the brand new iPad Air 2 that features an 18% thinner design, A8X processor, 8MP camera, TouchID, and anti-reflective screen. It’s a substantial update, but even with the new features it’s still a question of how many existing iPad owners will upgrade. Yesterday, Apple’s earnings report indicated that iPad sales declined for third straight quarter, and we’re nearly two million less than the same quarter last year. The main takeaway from all of this is that the iPad upgrade cycle is more like a computer than a phone.
In the early years of the iPad, it seemed that Apple’s tablet could just keep growing like the iPhone. Now, that’s simply not the case as people just aren’t in the market to upgrade a tablet every two years like they do on average with the iPhone. No matter how many new features are in the iPad Air 2, there are millions that are completely satisfied with the iPad Air, iPad 4th generation, iPad with retina display, or even the iPad 2. It’s not that the iPad Air 2 isn’t much better than these devices, it’s that these devices are still plenty capable in what people have grown accustomed to using them for under various use cases.
When you buy a new computer, you’re expecting it to last a number of years to the point that you don’t even think of when you will stop using it. When you buy a new iPhone, you’re given a two year contract making it easy to think when the commitment is done, and when you can be in the market for a new one. They’re two very different markets, and while Apple is making a large portion of the profit in both the computer, and smartphone industries, they require different strategies from companies. Apple has continued to offer an aggressive update cycle for the iPad with a new edition every year since 2010, including two models in 2012, but the market isn’t demanding that many updates. On the Mac side of things, Apple only offers significant changes every three years, or so with just spec bumps in the interim.
We may see more minor iPad upgrades going forward as Apple responds to tablet market demands. Apple has sold 240 million iPads in four years, and now they’re reaching the point where they need to appeal to those who have yet to buy an iPad. Of those 240 million sold, a lot are completely satisfied customers that spent $500 – $900 on their device, and plan to keep using it regardless what Apple introduces. Since consumers are viewing the iPad as a computer with a longer term commitment, it’s time for Apple to view the iPad in the same way.
There are obvious benefits of the iPad, and yet it’s still not a true computer replacement for many. Apple could have offered split screen multi-tasking with iOS 8.1, and the powerful iPad Air 2, but chose not to. They could have updated the Smart Covers to have built in keyboards, or other interactive features, since a new Smart Cover is required for the iPad Air 2 anyway with the thinner profile. Apple showed off the powerful looking Pixelmator for iPad at the event, but are still limiting their own software offerings on the iPad. Apple has continued to refine the original iPad, rather than building upon it. To sell more iPads, they will need to appeal to those that have not yet bought an iPad, or to those that don’t think there’s any usability benefit in the newest model. To do so, Apple will need to let the iPad do more, rather than just thinner, and faster each year.
The market is indicating that consumers view the iPad as a computer, and upgrade accordingly, so now it’s time for Apple to respond by updating the iPad to an all new form.
