Six years ago today, Steve Jobs unveiled the iPad. But now the tablet market is at a crossroads. MEF Minute looks back and explores what’s next…
In the weeks running up to Apple’s January 2010 press event, the rumour mill had been in overdrive. Consequently tech watchers knew a tablet was coming. They just didn’t know the details. Or the name.
When the iPad was unveiled, they didn’t know what to think of it either. After all, the tablet was not a new idea. Microsoft had unveiled one ten years earlier to utter indifference from the market. Of course, Apple had produced an infinitely better product, with sharp graphics, responsive touchscreen and – most important – an army of developer supporters eager to create apps for it.
And yet, despite all that, no one was completely sure what the iPad was actually for.
It was too large to replace the phone, obviously. And it lacked the keyboard that enabled users to do creative or productive work to any great extent. Apple’s magic dust overcame these doubts. The iPad was an overwhelming success. It sold 300,000 units on the first day and 2 million units in under 60 days.
And its soaring popularity endured for the next four years. Improvements to the iPad – notably the foldable magnetic Smart Cover, the addition of front and rear cameras, the upgrade to the hi-res Retina display, the launch of the iPad mini — kept interest high.
In November 2012, the iPad mini and 4th generation iPad sold three million in the first weekend. This was arguably the height of the iPad’s success. It led to analysts predicting the end of the PC/laptop era, with both consumers and the enterprise turning en masse to smartphones and tablets.
It didn’t turn out that way.
In January, 2015 Apple announced that 250 million iPads had been sold to date. It was a headline-grabbing stat, but it couldn’t mask the reality that sales were slipping. Or that tablets had clearly not reinvented computing. The tablet market’s decline was confirmed in August when research firm IDC revealed that worldwide shipments had slipped by eight per cent over the year.
This was just a few weeks after Apple revealed it sold just 10.9 million iPads in the June quarter, a fall of 18 per cent year on year. The iPad had generated $4.5 billion in revenue – nine per cent of Apple’s total, which was the smallest in its five-year history.
Revealingly, the iPad contributed less to Apple’s coffers than the Mac. Clearly, the tablet had not killed the laptop. But let’s get this into perspective. People still buy millions of iPads every quarter. And enterprises use tablets for all manner of uses.
The medium is evolving. Here are eight reasons how and why…
1. The surprising rise of the hybrid laptop
Tablets were supposed to replace laptops. But instead, they revived them. In 2015, IDC reported that 2-in-1 hybrids (tablets with a keyboard) were the high point in a difficult year for the tablet market. It predicted a 86.5 per cent rise in sales for hybrids. And it revealed 40 vendors active in the space.
2. Microsoft, the innovator?
Historically, Microsoft was characterised as being good at tech and terrible at design. But that changed with the Surface – the device that has been credited as kickstarting the hybrid market. In the first six months of 2015 Microsoft around 1.5 million units, a three-fold increase year on year. However, more recent sales have been underwhelming.
3. Amazon goes ultra-cheap
If tablets are just for consuming, why shouldn’t they be dumb and cheap? That seems to be the inspiration behind Amazon’s $50 Fire tablet. This sub-HD plastic-encased device was launched in 2015 and over Christmas it was Amazon’s top selling item.
4. The upgrade cycle problem
Why should anyone buy a new tablet? With phones, there are real incentives to upgrade. The tech improves markedly as new devices are introduced (though this is slowing), and in many markets handset subsidies offer another incentive.
But tablets? When your main use case is watching Netflix or playing puzzle games, you’re not swayed by a slightly thinner screen or faster processor. As a result upgrade cycles are very long. “We continue to get feedback that tablet users are holding onto devices upwards of four years,” said Ryan Reith, program director of IDC’s Worldwide Quarterly Mobile Phone Tracker.
5. The return of the stylus
In September Apple announced a new large-screen tablet called the iPad Pro. It comes with a Surface-style keyboard and a stylus (which Apple pointed calls Apple Pencil). More proof that the post-Jobs Apple is prepared to embrace features the former CEO loathed.
6. Google moves in
Google had flirted with the tablet market via various Nexus devices. But in September 2015, it revealed it had put its own hardware team to work on its flagship hybrid tablet, the Pixel C.
7. Tesco gives up on its mini-tablet
UK supermarket chain Tesco launched its cheap Hudl in September 2013, and it was a big success. It sold more than 750,000 units. But two years later, it announced it would discontinue the line
8. Apple cannibalises itself with the iPhone 6 Plus
Experts scoffed when the first ‘phablets’ were launched. Who would buy these huge smartphones? Well, millions of people as it turned out. Ultimately, Apple couldn’t ignore public tastes, and the firm launched its outsized iPhone 6 Plus in September 2014.
It was such as success that CEO Tim Cook admitted it damaged the sales of iPad. “We are clearly seeing cannibalisation from the iPhone and on the other side from the Mac,” Cook said. “We have never worried about that, it is what it is, and at some point it will straighten out.”
