Here's Why Tim Cook Is Upbeat On iPads Despite Its Shrinking Sales


tim cook apple

REUTERS/Robert Galbraith

Apple Inc CEO Tim Cook speaks on stage during an Apple event in San Francisco, California October 22, 2013.

One of the most disappointing figures from Apple's June quarter earnings was its slowing iPad sales.


Apple sold 13.3 million iPads last quarter, which is down 9% year-over-year, and slightly below Wall Street's forecasted sales of 13.8 million.

Yet, Apple CEO Tim Cook sounded more upbeat when asked about iPads during the earnings call. Basically he gave three reasons for his optimism.

First of all, users love the iPad. In a recent survey, iPad Air and iPad Mini each received a 98% and 100% satisfaction rating, respectively, according to Cook. On top of that, 63% of the people planning to buy a tablet said they would pick the iPad over other products.

He also cited the iPad's massive growth in emerging markets. Cook said iPad sales grew year-over-year 64% in the Middle-East, 51% in China, and 45% in India. That's much higher than the sales in more mature markets, like the U.S., but he said tablets are still in its early days and there's much more growth to come.


"I get really excited when I see that more than 50% of the iPads that we're selling are going to someone who is a first-time tablet buyer," Cook said.

The last but perhaps most important reason is the enterprise market. Pretty much all of Fortune 500 companies and 93% of the Global 500 companies currently use iPads.

But when you look at the larger commercial sector, that number drops to 76%, and in business it goes all the way down to 20%, Cook said, citing an IDC report. That's significantly lower than the 60% penetration rate of notebooks in the U.S. business sector.

"And so we think that there is a substantial upside in business. And this was one of the thinkings behind the partnership IBM that we announced last week," Cook said.

Through the IBM partnership, Cook thinks Apple will reach a "better go-to market" and see more apps written specifically for mobile devices, too.


In fact, Cook is not alone in thinking iPads and tablet sales will grow in enterprise this year.

Research firm IDC is pretty positive when it comes to tablet sales in the enterprise sector, as it wrote in a report today: "We believe that stronger commercial demand for tablets in the second half of 2014 will help the market grow and that we will see more enterprise-specific offerings, as illustrated by the Apple and IBM partnership, come to market."