Apple Inc. (NASDAQ:AAPL)’s New iPad May Not Generate a Lot of Sales

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By jcameron on October 16, 2014 Technology & Software

Apple Inc. (NASDAQ:AAPL) will be releasing the newer, thinner iPad models today. However, the investors don’t seem to be too enthusiastic about it. The reason is that the new tablets do not introduce any extraordinarily different features from those of the previous models. This means that the new models of the iPad will not attract as new buyers like the iPhone 6 did. Thanks to the growth of the company in this year, many homes without a tablet would love to own one.

At 1 p.m. today. Apple Inc. (NASDAQ:AAPL) will hold a press conference to reveal the new products. Yesterday, the company released some images of upgraded version of iPad mini and iPad Air in a manual that they posted online. The manual was a guide to using these devices. In the press conference, the company is expected to announce new Macs and details about their new mobile payment service, the Apple Pay.

According to the analysts, the lack of exceptionally new features in the iPad means that the product will not generate a lot of revenue. These iPads are faster than the older ones and have better quality screens. Still, this is not enough to encourage buyers to upgrade their current iPad.

Apple Inc. (NASDAQ:AAPL)’s growth in tablet sales has slowed over the years. The reason for this is the introduction of cheaper competitions in the market. Another reason is that customers are satisfied with their older product so much that they are hesitant in buying a new iPad. This year, the iPad sales decreased by 13% and fell to 29.6 million.

60% of the households in the U.S. are in possession of a tablet as it is. Of these, 70% households are those that own both a smartphone and a tablet. Two years ago, 46% percent of the households that owned a tablet used iPads. This percentage has dropped to 37% this year. In the market, the tablet sales are continuously growing. The fall in sales for Apple Inc. (NASDAQ:AAPL) has been greater than that for other companies. After Apple Inc. (NASDAQ:AAPL), the leading sellers of tablets in the U.S. are Amazon (NASDAQ:AMZN) and Samsung (NYSE:005930.KS). Another competitor is Lenovo (NYSE: 0992.HK) which is selling cheaper tablets. Then there are several Asian companies as well that have started manufacturing tablets which are even more affordable.

It is expected that the tablet sales will increase only by 11% in the global market. Meanwhile, last year, these sales had increased by 55%. Apple Inc. (NASDAQ:AAPL) could bolster the sales of the new iPads by selling them to major corporations and large institutions. The company had made a deal with IBM (NASDAQ:IBM) a few months ago. In this niche, the company could see a lot of growth. The idea is to take the functionality of the iPad beyond that of a device that is used for entertainment. Applications have been designed by IBM (NASDAQ:IBM) for industries like health and finance which could help gain more sales. Maybe, Tim Cook has a surprise up his sleeve too. Who knows?