The Tragedy of the Apple (NASDAQ:AAPL) iPad, the Rebirth of the Mac

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By Hanson So on November 4, 2014 Technology & Software

The wave of the iPad, by the look of things, is coming to an end. Mac is closing in on becoming Apple’s second largest category in terms of generating revenue. Last quarter earnings revealed that Mac finally displaced iPad from the second position for the first time in three years. Mac sales rose up by 20 percent while iPad sales observed a constant decline, dropping down by 17 percent. Could this be the end of the iPad?

When iPad came out, it was Apple’s (NASDAQ:AAPL) fastest selling gadget and it struck an instant chord in the hearts of the customers. But times have changed now; smartphones have become too strong to let tablets squeeze into the competition. In fact, smartphones have morphed into phablets itself. Samsung’s Galaxy Note series is one of a kind phablet which can stand up to the iPad any day.

Perhaps that is one of the reason the iPad is fading away. Though iPad managed to generate a hefty 5.3 billion last year, it failed to meet the huge expectations considering the start it had previously got. In contrast, the Mac has been enjoying an exceeding growth rate. Mac annual sales went up by 21 percent and 25 percent sequentially. Out of the last 34 quarters, Mac has shown promise in 33 of them.

The PC market, even though in not a good position, still managed to post a good number for the Mac; despite a drop in PC shipments. If compared to the overall 300 million PC sales during last year, Mac cuts out a niche market for itself. With the mobile devices growing stronger and faster in a race to replace the PC once and for all, it will be hard for Mac to stick around despite its growth. But as far as current sales are concerned, it’s the top of the food chain in the PC world.

It is a bit presumptuous to think that the iPad will be eliminated as Apple (NASDAQ:AAPL) management has said that the current decline is a small setback, which the iPad will overcome soon. The recent new iPad releases might be the tide that will change everything for the iPad category. On paper now, if we compare Mac’s growth to iPad’s decline, one evens out another. iPad may not be fading away but point of the matter is that the Mac is sticking around just the same, in fact stronger and more prominent.

No matter what the management at Apple Inc (NASDAQ:AAPL) says, the business market created by iPad has been consistently poor over the past 2 years. It will be in favor of Apple (NASDAQ:AAPL) if Mac takes over iPad’s profits. Mac certainly has the capability and power to post great sales, the only factor that is playing against the Mac is that the PC is the thing of the past. But Mac is still needed around, in many industries as it is widely appreciated.

With new categories being explored by Apple (NASDAQ:AAPL), it might be hard for the iPad to rebound once it goes completely bust, but for now Apple (NASDAQ:AAPL) has time to think about revitalizing its iPad category.