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Apple CEO Tim Cook does his best to defend iPads' sinking sales

Jul 22, 2015, 06:09 IST

The iPad's slowing momentum has been well-documented for some time now, but Apple's CEO Tim Cook continued to defend the tablet during its earnings call on Tuesday.

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Apple reported that iPad sales dropped another 18% year-over-year, to 10.9 million units in the June quarter of this year, a four-year low. That translates to about $4.5 billion in revenue, down 23% from the same quarter of last year. 

As a portion of Apple's overall revenue, iPad sales accounted for only 9.1% this quarter, a huge decline from the same quarter of last year when it recorded 15.7% of the total.

On top of that, iPad is now generating less revenue than the company's "Services" category, which is comprised of iTunes, Apple Pay, and other licensing products. According to the market research firm, Counterpoint, this is the first time that Services surpassed iPad's revenue.

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CounterPoint

That's not a good sign for the iPad's future considering it was only last quarter that iPads notched less sales than the Mac products for the first time in over a year. Aside from the "Other Products" category, which includes the Watch and Apple TV, the iPads now bring in the smallest revenue for Apple.

But during a call with analysts, Cook did his best to appear not too worried about it. He said he's still bullish on iPads because of the new features, like split view and slide over, that are available on its newest models. He also said the upgrade cycle is about to come and its usage rate is higher than any other competing product.

"I am still bullish on iPad...I think iPad upgrade cycle will eventually occur. We're 6X greater in usage than nearest closest rival. It's a fantastic product. I see a lot of runway," Cook said.

He also stressed there's a huge untapped market, especially in emerging markets. "As I look geographically, in emerging markets where we are doing well, our share is still not high. I look around, I see opportunity left and right," he said. "It's not like people have forgotten the iPad or anything."

But that still doesn't address the bigger question that's been surrounding iPads for years - that it's stuck between laptops and phablets, while its durability is longer than other computing devices, which slows the upgrade cycle.

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In fact, the iPad sales growth has been on a downward spiral for some time now, while showing negative growth almost every quarter since the second quarter of 2013.

BI Intelligence

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