Refurbished Apple iPad Mini - Is Tim Cook Wrong About the iPad mini? - buyEtail.com

Investors are questioning whether or not there's any growth left for Apple's (NASDAQ: AAPL  ) second-largest business segment: iPads. Apple's iPad sales have been down, year over year, in four of the past five quarters. In fact, the tablet market, in general, appears to be facing enormous headwinds. Research company IDC projects tablet sales will only grow by 12% this year, down from 52% last year. In spite of the recent slowdown, Apple CEO Tim Cook made it clearer than ever this week that he is calmly confident about the future of the iPad.

"We're very bullish about the future of the tablet market," Apple CEO Tim Cook boldly proclaimed during the company's third-quarter earnings call earlier this week. .

iPad Air. Image source: Apple.

Tablets are not destined for ubiquity
But, despite Cook's optimism for tablets, it's becoming increasingly clear that tablets are not destined for ubiquitous adoption the way smartphones are.

As NPD DisplaySearch pinpointed in July, one of the major drivers behind the first quarterly decline in year-over-year tablet shipments earlier this year was smartphones with displays larger than 5.5 inches, which are blurring the lines between the smartphone and tablet category -- especially for smaller tablets like Apple's iPad mini. And, as The Wall Street Journal's Daisuke WakaBayashi and Shira Ovide recently noted, there is pressure at the other end, too: "Laptop computers grow thinner and lighter." The middle ground that tablets once had staked out isn't as defined as it used to be.

Of course, it only takes common sense to conclude that the entire global population is not going to want a PC, tablet, and a smartphone. But rest easy... there is still opportunity for Apple in the tablet market. Ubiquity may not be the destiny for tablets, but the market is certainly not saturated yet -- at least not for the iPad.

Growth remains, Cook says
Apple CEO Tim Cook cites several reasons the company isn't worried about a recent decline in its tablet business. First, customer satisfaction is off the charts. Consider Apple CEO Tim Cook's prepared remarks during the third-quarter conference call about how much users love the iPad.

In a survey conducted in May by ChangeWave, iPad Air registered a 98% customer satisfaction rate, while iPad Mini with retina display received an astonishing 100% customer satisfaction rate.

 

iPad mini. Image source: Apple.

This sort of passion drives more sales -- especially when Apple refreshes the iPad line. Further, it indicates that iPad users have found helpful ways to use the tablet. While iPad sales may be down today, the love for Apple's tablet is not lost, Cook says.

The [ChangWave] survey also found that among people planning to purchase a tablet within 90 days, 63% plan to buy an iPad and our own data indicates that more than half of customers purchasing an iPad are buying their very first iPad.

Second, business and education iPad sales are poised to soar. Apple is already the dominant player in these categories. In the education tablet market, for instance, the iPad is the tablet of choice 85% of the time. Among the fortune 500 companies, the iPad is used in 99% of them.

But there's room for growth in both of these markets, particularly business, Apple says -- especially with Apple's recently announced partnership with IBM.

We think our partnership with IBM, providing a new generation of mobile enterprise applications, designed with iPad's legendary ease of use and backed by IBM's cloud services and data analytics will be one such catalyst for future iPad growth.

Third, innovation is coming. "We still feel that category as a whole is in its early days and that there is also significant innovation that can be brought to the iPad and we plan on doing that," Cook said during the call.

Perhaps Cook is talking about innovation that stretches beyond simply thinner and faster, and this innovation could be part of the reason why one Apple executive said the company has the best product pipeline for 2014 than it's had in 25 years.

 

iPad Air. Image source: Apple.

So, can we expect Apple to really return to growth in iPad sales? With the launch of a new line of iPads, growth appears possible. And then, once you factor in emerging markets like China, India, and the Middle East, a return to growth for Apple's second-largest business segment looks likely. Year-over-year growth in these regions in Apple's third-fiscal quarter was 51%, 45%, and 54%, respectively. What's special about these markets is that, even though they are small for Apple's iPad sales today, they have potential to be meaningful in the future -- especially China.

But here is where the game changers for Apple's iPad sales could be. Add in continued opportunity in business and education, where Apple has already proven itself. And, finally, mix in some "significant innovation," and Apple may have the potential to return to double-digit growth rates in tablet sales for a few more years; now, a return to year-over-year gains in iPad sales looks inevitable in coming years.

Leaked: Apple's next smart device (warning, it may shock you)

Apple recently recruited a secret-development "dream team" to guarantee its newest smart device was kept hidden from the public for as long as possible. But the secret is out, and some early viewers are claiming its everyday impact could trump the iPod, iPhone, and the iPad. In fact, ABI Research predicts 485 million of this type of device will be sold per year. But one small company makes Apple's gadget possible. And its stock price has nearly unlimited room to run for early in-the-know investors. To be one of them, and see Apple's newest smart gizmo

source: http://www.fool.com/investing/general/2014/07/27/is-tim-cook-wrong-about-the-ipad.aspx

by Daniel Sparks

http://www.buyetail.com