Apple's iPad business is experiencing major shrinkage (AAPL)

January 31, 2017

Apple's iPad business is experiencing major shrinkage (AAPL)

pokemon go ginger kid playing with ipad

Apple reported earnings today for the all-important holiday quarter of 2016, with a clean beat on the top and bottom lines.

But according to Apple's quarterly report, Apple shipped about 13 million iPads, which is down 19% from the same period in 2015. Revenue from the iPad business is down 22% year-on-year to $5.5 million, too.

That's not an encouraging result for the biggest gift-giving time of the year, and it just continues the steady decline of the iPad business.

In 2016, Apple introduced a new model of iPad, too, with the 9.7" iPad Pro — a device designed to be used with a keyboard, intended to be somewhere between a tablet and a laptop, similar to Microsoft's Surface computers. Meanwhile, Apple fans are impatiently waiting for the company to release a Mac with a full touchscreen.

A possible explanation is that, as we've seen in the past, iPad owners tend to hold on to their devices much longer before trading it in for a new model, compared with the iPhone. It means there's unlikely to be a huge rush to buy any new models.

It's possible there's light at the end of the tunnel, however: Apple is reported to be working on a total iPad redesign, to launch as soon as this year, which could maybe spur a big upgrade cycle.

Here's the chart:

bii ipad sales growth 4q16