Apple put out their Q3 numbers today after the closing bell, and the headline everybody's running with is that iPhone sales beat expectations again: 31.2 million units, way past whatever number Wall Street had scribbled down going in. Stock popped something like 5% in after-hours trading on that alone. Fine. Good for them.
The part that actually caught my eye is buried a few paragraphs down: iPad sales fell. 14.6 million units this quarter, down from 17 million a year ago. That's not a rounding error. That's the flagship device of an entire new product category actually selling fewer units than it did twelve months back, and I don't think that's an accident or a blip.
I'm typing this post on an iPad 2. Bought it the week it came out, back in March 2011, which makes it — what, two and a half years old now? There is nothing wrong with it. It browses fine. It plays Netflix fine. Battery still gets me through most of a day of casual use. The only real complaint I have is that iOS updates seem to slow it down juuust enough every year to make me suspicious, which is its own little conspiracy theory I won't fully commit to here but also won't fully let go of.
Why would I spend $500 on whatever they're calling the current model (is it the "iPad (4th generation)" now? I genuinely lose track, and the naming alone is reason enough to be annoyed at this company sometimes) when the one I already own does literally everything I bought it to do. That's the thing nobody in the earnings coverage seems to want to say directly: phones wear out their welcome because you drop them, the battery degrades, your contract's up and there's a shiny new one at the store. Tablets don't really do that. Mine lives on the arm of the couch or gets tossed in a bag for the train, and it's just as good at that job today as it was in 2011.
Apple's whole business model assumes a yearly upgrade itch, and it worked beautifully on phones because phones live hard lives. Tablets live soft ones. Nobody's cracking a screen dropping an iPad off a barstool the way they do a phone, mostly because nobody's holding an iPad up to their ear at a bar in the first place. So the thing just sits there, working, for years, and eventually the sales chart looks like what Apple posted today.
Revenue was basically flat year over year at $35.3 billion, and net profit was down close to a quarter from last year's number, with margins sliding again. I want to say this is something like the sixth straight quarter that's happened, though don't hold me to the exact count. None of that reads like a company in trouble. Apple's still enormous, still profitable in a way most companies would kill for. But it's not the same growth story it was even eighteen months ago, and the iPad line specifically looks like it's hit some kind of ceiling that a slightly faster processor and a marginally better camera isn't going to fix.
I keep seeing people online treat this like it's some huge mystery. It's not. You don't need a new iPad every year for the same reason you don't need a new toaster every year. It keeps toasting. Somebody at Apple is going to have to figure out what the next actual reason to upgrade is, because "it's a little faster" clearly isn't cutting it anymore, at least not for the fourteen million people who apparently decided to sit this round out.
Anyway. If you're reading this on a two or three year old iPad right now, congratulations, you're the reason that chart looks the way it does. We're in this together.