CHART OF THE DAY: What The Heck Happened To Apple's iPad Business?

Apple's iPad business, which is supposed to be its second mega-business, has already hit the wall as far as growth is concerned.

Last quarter, Apple reported sales of 14.6 million units, a 14% drop on a year-over-year basis. On the company's earnings call, Apple's execs said that if you look at the actual sell through of the iPad, and factor in channel inventory changes, then it was down 3%.

Part of the reason the iPad business fell is that Apple didn't roll out a new version of the iPad last quarter. In the June 2012 quarter, it was introduced the high-resolution iPad which boosted sales. With no new model of the iPad, sales lagged in comparison.

However, last year Apple wasn't selling the iPad Mini. The $329 iPad Mini should have provided enough of a lift to offset the lack of a new iPad model.

This isn't just a one-off bad quarter. If you look at the trend, you can see that growth is in a general nose dive for the iPad. Analyst Gene Munster says the reason the iPad business is weaker than expected is that the market is "becoming more price sensitive than we previously expected." In other words, consumers are buying cheaper tablets from Apple's rivals.

For why that's troubling for Apple, check out Henry Blodget's take here...