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It's fascinating to me that the iPad is flat and being effectively cannibalized by the iPhone. Can anyone think of a similar example where a newer form factor g

It's fascinating to me that the iPad is flat and being effectively cannibalized by the iPhone. Can anyone think of a similar example where a newer form factor gets re-absorbed or passed by the previous form factor? (I probably need a more elegant way to say this)

aaronblohowiak 12y ago
Laptops ate the desktop. Is that what you mean?
- redthrowaway 12y ago
  Other way around. The analogy would be the desktop eating the laptop.
tinkerrr 12y ago
You mean like the iPod was cannibalized by the iPhone, more or less, and it's revenues have been steadily declining (-28% this quarter compared to Q4 2013)?
- jusben1369 12y ago
  Well that's "normal" progress. To take your example it would be the iPod suddenly roaring back to life after the iPhone had been around 3 years or more and growing rapidly and the iPhone becoming flat in sales. That's why it's so unique (I think)
- bgramer 12y ago
  Kind of like how iPod Nano cannibalized iPod Mini.
  - PKop 12y ago
    Nano came after Mini, which would be the expected pattern of canibalization. OP's point was older product category canibalizing newer one.
- adevine 12y ago
  No, I believe OP is pointing out that a newer product (the iPad) is being cannibalized by a product originally released earlier (the iPhone). The iPhone cannibalizing the iPod was to be expected - the iPhone came later. I think it is a pretty astounding change. For a while everyone was thinking "Tablets would kill PCs/laptops". Instead, I think these "super phones" may end up killing (OK, not killing, but at least taking a big bite from) tablets, while laptops remain unscathed because they are still better for heavy duty content creation.
steven2012 12y ago
It's actually pretty smart. They are allowing cannibalization of the iPad to the iPhone Plus because the margins on the iPhone Plus are higher, and people actually upgrade it every 2 years. I don't know a single person, including myself, that has had any impetus to upgrade their iPad, so this is a way of shifting people over to a phone model where there is a more defined upgrade cycle.
- gress 12y ago
  My mother in law and wife are both desperate to upgrade their iPads, which are an original model, and a non-retina iPad mini. We may well buy 2 new iPads over the next 10 months. The point being that there is an upgrade cycle that is more like the Mac than the iPhone, but there is a cycle.
- jshen 12y ago
  I agree, just want to point out that if the iPad is used for gaming it gives one a compelling reason to upgrade. I bought a new iPad because hearthstone ran like crap on my iPad 2.
- baddox 12y ago
  > I don't know a single person, including myself, that has had any impetus to upgrade their iPad Allow me to introduce myself :) I've had the iPad 2, iPad 3rd gen (Retina), and iPad Air, and I will absolutely be upgrading to the Air 2 as soon as it hits the Apple Store (by the way, what's up with them not announcing an in-store release date?). It has become arguably my primary non-work computer, as my 3 year old Windows gaming PC begins to gather dust due to my not playing games any more.
  - Flenser 12y ago
    How do you work on it? Do you remote to a more powerful machine or do you use apps?
  - untog 12y ago
    Have you ever tried the 11" Air?
melvinmt 12y ago
There is no "previous form factor", the iPhone 6 Plus is still a "newer form factor" absorbing the older one.
wfjackson 12y ago
>It's fascinating to me that the iPad is flat and being effectively cannibalized by the iPhone iPad sales were flat or dropping even before the bigger iPhones landed. http://hyderabadjunction.com/wp-content/uploads/2014/07/iPhone-And-iPad-Sales.jpg http://hyderabadjunction.com/wp-content/uploads/2014/07/iPho... And over the past few quarters, PC sales either stopped declining or are actually increasing or flat. So the post-PC trend doesn't seem to be in full swing.
- gress 12y ago
  PC sales have only stopped declining because of the Mac. If you take that out of the equation, the PC is still dropping.
dntrkv 12y ago
I don't see any reason to believe that is the case. I think a more logical explanation would be that consumers aren't gonna buy a new iPad every year. I bought an iPad 2 for my parents and they're still using it to this day and have no issues with it. Maybe next year I will get them an updated version. But if you look at the iPhone, most people are on a 2 year upgrade schedule.
- jusben1369 12y ago
  But you're only looking at one part of the equation which is existing customers refreshing vs net new sales. So while I agree the refresh cycle might be slower than imagined that's not the only thing going on here.
  - MBCook 12y ago
    Doesn't it make more sense that without the subsidy the iPad is treated more like a computer that someone upgrades every few years when they have an issue (breakage or speed) instead of every year or two like an iPhone (where you're throwing money away)? The iPhone is pretty exceptional product, is it really fair to hold everything else to that standard? Are people going to cry foul when consumers don't replace their Apple Watch every 18 months?
    - deleted 12y ago
      [deleted]
    - jusben1369 12y ago
      Yes i think you're really onto something and it's part of a much broader discussion. There's a lot of negativity around the two year subsidized plans by telcos in the US. Yet would people be upgrading their iPhone's without these programs? Is the iPhone unique vs laptops and tablets? Or would iPhone sales drop dramatically if those programs disappeared as if we had to pay the full price out of pocket the refresh cycle would move out 12 - 24 months.
- Kylekramer 12y ago
  Upgrade cycles shouldn't affect sales growth unless the upgrade cycle has gotten longer since the iPad's introduction.
sytelus 12y ago
iPads are cannibalized by 3X-5X cheaper Android tablets[1], not iPhone. People have bought iPhone because it costs upfront $200. That's a magic price. Above that price demand swiftly drops. [1] According to Gartner, there were 68% more tablets sold in 2013 compared to 2012. Android’s share of the tablet market rise from 45.8% in 2012 to 61.9% in 2013 while Apple’s share has fallen from 52.8% all the way down to 36%. http://www.gartner.com/newsroom/id/2674215 http://www.gartner.com/newsroom/id/2674215
- ghshephard 12y ago
  I would be interested to see some market research that shows people replacing their iPad air with a $200 android tablet instead of an iPad air 2. I suspect it's more the case that iPads are not upgraded as often, also, for many, their phone (android or iPhone) can do many of the jobs of a tablet, so they don't even purchase a tablet for that purpose.
- baddox 12y ago
  > People have bought iPhone because it costs upfront $200. That's a magic price. Above that price demand swiftly drops. Is that so? I've always wondered what percentage of iPhones sold are the base storage tier. I certainly would never buy the base model, at least until they up it to 32GB.
- putlake 12y ago
  I don't know who is buying all these tablets Gartner is reporting. Tablet traffic to my website (Alexa top 10K) has stagnated at under 10% for over a year now. Apple is not wrong to look at usage share rather than simply at units shipped. 78% of visits to my website from tablets in the last 30 days were from iPad.
ghshephard 12y ago
I think the iPad has a longer replacement cycle - I have an iPad 3 that I use a lot - pretty much daily, and I purchased it on day of release march 2013. While I upgrade my iPhone every two years, I am so happy with my iPad I'm happy to wait another year, or maybe even two - it's fast, has an awesome screen - plus, it will make the leap onto the iPad air all that more awesome when I finally do upgrade.
johnpowell 12y ago
I have a iPhone6 which replaced a 5. My two year contract was up so I sold the 5 and got the 6. I actually made money on upgrading my phone. My iPad3 still works fine for what I use it for and won't get upgraded until it no longer works.
- megablast 12y ago
  I doubt that you made money. Just because you made >$200 doesn't mean you made anything. You still have those costs of paying of the entire cost of the iPhone >$900 that you seem to be ignoring, just because they are hidden in your monthly bill.
  - baddox 12y ago
    Depending on the carrier and plan, they might only be "hidden in the monthly bill" in the sense the monthly bill would be the same regardless of whether the device was upgraded.
    - bruceboughton 12y ago
      Other monthly plans are available.

aaronblohowiak 12y ago

Laptops ate the desktop. Is that what you mean?

redthrowaway 12y ago
Other way around. The analogy would be the desktop eating the laptop.

tinkerrr 12y ago

You mean like the iPod was cannibalized by the iPhone, more or less, and it's revenues have been steadily declining (-28% this quarter compared to Q4 2013)?

jusben1369 12y ago
Well that's "normal" progress. To take your example it would be the iPod suddenly roaring back to life after the iPhone had been around 3 years or more and growing rapidly and the iPhone becoming flat in sales. That's why it's so unique (I think)
bgramer 12y ago
Kind of like how iPod Nano cannibalized iPod Mini.
- PKop 12y ago
  Nano came after Mini, which would be the expected pattern of canibalization. OP's point was older product category canibalizing newer one.
adevine 12y ago
No, I believe OP is pointing out that a newer product (the iPad) is being cannibalized by a product originally released earlier (the iPhone). The iPhone cannibalizing the iPod was to be expected - the iPhone came later. I think it is a pretty astounding change. For a while everyone was thinking "Tablets would kill PCs/laptops". Instead, I think these "super phones" may end up killing (OK, not killing, but at least taking a big bite from) tablets, while laptops remain unscathed because they are still better for heavy duty content creation.

steven2012 12y ago

It's actually pretty smart. They are allowing cannibalization of the iPad to the iPhone Plus because the margins on the iPhone Plus are higher, and people actually upgrade it every 2 years. I don't know a single person, including myself, that has had any impetus to upgrade their iPad, so this is a way of shifting people over to a phone model where there is a more defined upgrade cycle.

gress 12y ago
My mother in law and wife are both desperate to upgrade their iPads, which are an original model, and a non-retina iPad mini. We may well buy 2 new iPads over the next 10 months. The point being that there is an upgrade cycle that is more like the Mac than the iPhone, but there is a cycle.
jshen 12y ago
I agree, just want to point out that if the iPad is used for gaming it gives one a compelling reason to upgrade. I bought a new iPad because hearthstone ran like crap on my iPad 2.
baddox 12y ago
> I don't know a single person, including myself, that has had any impetus to upgrade their iPad Allow me to introduce myself :) I've had the iPad 2, iPad 3rd gen (Retina), and iPad Air, and I will absolutely be upgrading to the Air 2 as soon as it hits the Apple Store (by the way, what's up with them not announcing an in-store release date?). It has become arguably my primary non-work computer, as my 3 year old Windows gaming PC begins to gather dust due to my not playing games any more.
- Flenser 12y ago
  How do you work on it? Do you remote to a more powerful machine or do you use apps?
- untog 12y ago
  Have you ever tried the 11" Air?

melvinmt 12y ago

There is no "previous form factor", the iPhone 6 Plus is still a "newer form factor" absorbing the older one.

wfjackson 12y ago

>It's fascinating to me that the iPad is flat and being effectively cannibalized by the iPhone iPad sales were flat or dropping even before the bigger iPhones landed. http://hyderabadjunction.com/wp-content/uploads/2014/07/iPhone-And-iPad-Sales.jpg http://hyderabadjunction.com/wp-content/uploads/2014/07/iPho... And over the past few quarters, PC sales either stopped declining or are actually increasing or flat. So the post-PC trend doesn't seem to be in full swing.

gress 12y ago
PC sales have only stopped declining because of the Mac. If you take that out of the equation, the PC is still dropping.

dntrkv 12y ago

I don't see any reason to believe that is the case. I think a more logical explanation would be that consumers aren't gonna buy a new iPad every year. I bought an iPad 2 for my parents and they're still using it to this day and have no issues with it. Maybe next year I will get them an updated version. But if you look at the iPhone, most people are on a 2 year upgrade schedule.

jusben1369 12y ago
But you're only looking at one part of the equation which is existing customers refreshing vs net new sales. So while I agree the refresh cycle might be slower than imagined that's not the only thing going on here.
- MBCook 12y ago
  Doesn't it make more sense that without the subsidy the iPad is treated more like a computer that someone upgrades every few years when they have an issue (breakage or speed) instead of every year or two like an iPhone (where you're throwing money away)? The iPhone is pretty exceptional product, is it really fair to hold everything else to that standard? Are people going to cry foul when consumers don't replace their Apple Watch every 18 months?
  - deleted 12y ago
    [deleted]
  - jusben1369 12y ago
    Yes i think you're really onto something and it's part of a much broader discussion. There's a lot of negativity around the two year subsidized plans by telcos in the US. Yet would people be upgrading their iPhone's without these programs? Is the iPhone unique vs laptops and tablets? Or would iPhone sales drop dramatically if those programs disappeared as if we had to pay the full price out of pocket the refresh cycle would move out 12 - 24 months.
Kylekramer 12y ago
Upgrade cycles shouldn't affect sales growth unless the upgrade cycle has gotten longer since the iPad's introduction.

sytelus 12y ago

iPads are cannibalized by 3X-5X cheaper Android tablets[1], not iPhone. People have bought iPhone because it costs upfront $200. That's a magic price. Above that price demand swiftly drops. [1] According to Gartner, there were 68% more tablets sold in 2013 compared to 2012. Android’s share of the tablet market rise from 45.8% in 2012 to 61.9% in 2013 while Apple’s share has fallen from 52.8% all the way down to 36%. http://www.gartner.com/newsroom/id/2674215 http://www.gartner.com/newsroom/id/2674215

ghshephard 12y ago
I would be interested to see some market research that shows people replacing their iPad air with a $200 android tablet instead of an iPad air 2. I suspect it's more the case that iPads are not upgraded as often, also, for many, their phone (android or iPhone) can do many of the jobs of a tablet, so they don't even purchase a tablet for that purpose.
baddox 12y ago
> People have bought iPhone because it costs upfront $200. That's a magic price. Above that price demand swiftly drops. Is that so? I've always wondered what percentage of iPhones sold are the base storage tier. I certainly would never buy the base model, at least until they up it to 32GB.
putlake 12y ago
I don't know who is buying all these tablets Gartner is reporting. Tablet traffic to my website (Alexa top 10K) has stagnated at under 10% for over a year now. Apple is not wrong to look at usage share rather than simply at units shipped. 78% of visits to my website from tablets in the last 30 days were from iPad.

ghshephard 12y ago

I think the iPad has a longer replacement cycle - I have an iPad 3 that I use a lot - pretty much daily, and I purchased it on day of release march 2013. While I upgrade my iPhone every two years, I am so happy with my iPad I'm happy to wait another year, or maybe even two - it's fast, has an awesome screen - plus, it will make the leap onto the iPad air all that more awesome when I finally do upgrade.

johnpowell 12y ago

I have a iPhone6 which replaced a 5. My two year contract was up so I sold the 5 and got the 6. I actually made money on upgrading my phone. My iPad3 still works fine for what I use it for and won't get upgraded until it no longer works.

megablast 12y ago
I doubt that you made money. Just because you made >$200 doesn't mean you made anything. You still have those costs of paying of the entire cost of the iPhone >$900 that you seem to be ignoring, just because they are hidden in your monthly bill.
- baddox 12y ago
  Depending on the carrier and plan, they might only be "hidden in the monthly bill" in the sense the monthly bill would be the same regardless of whether the device was upgraded.
  - bruceboughton 12y ago
    Other monthly plans are available.