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iPad – The Sales Story



June 2013
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Following are some of the reasons and facts for success of iPad:

Goodwill created by the Apple iPhone and iPod created an advantage for the sale of iPad, it also gained positive response at the launch of the iPad1 there was a long queue and lots of pre orders. iPad was launch on 3rd of April and sales on 5th April were 3 billion. The sales at end of quarter of Apple from the date iPad was launched resulted increase in 17% of Apple sales. The sales of iPad at the end of that quarter were 3.27 million. The rise in sales was due to goodwill enjoyed and lack of competition in the market. There were very few competitors in the market. The competitors were Motorola and Blackberry and did not have impact on this product. In last 2 years lot of new updated versions were launch due to the competition in the market like iPad2, iPad3, iPad4, and iPad mini.

It is still one of the most successful products of Apple but now due to lot of competition from Kindle, Google Nexus the sale of iPad has declined due to the price barrier. Whereas Apple’s latest iPad costs $499 and Kindle tablet are available at $199 with Android system which has resulted in decrease in the sales. Since Apple’s major competition comes from Android system as it  is available in many tablets like Samsung, Google Nexus, Kindle and sales gets divided. The sales of Apple iPad has declined but still is on top of the table in tablets. iPad needs to cut its cost as comparde to Kindle to stay alive in market and face the stiff competition. Android has gained ground by the sheer numbers of companies and products pushing it. But the real measure of success is in the profits, and Apple is making as much as 70% of all the profits in smart phones and about 85% of the profits in tablets.

Following are the reasons why Apple iPad sales are going down:

The latest figure of the month of December 2012 where the market share of iPad was 78.86% as compared to the previous month was 86% in the tablet market. The competitors of an apple iPad were Amazon kindle fire, Google nexus and Microsoft surface. In the month of December 2012, Kindle fire and Google nexus grew between 1-3%  and at the same time iPad share went down to the value 7.14% as compared to the previous year because many analysts had predicted that if Kindle fire and Google nexus have successfully launched in India, then they would capture the market from the Apple iPad. They provide much better functionality and services to the customers.

According to a recent report from want China town employees are reporting of a sharp decline in the number of iPads assembled each day at the company’s assembly line. The employee went on to state that they had 10 days off during March due to the sales decline, with three of the 20 independent assembly lines being stopped to make way for other products to be produced.

Hong Kong typically gets 30% healthy margin given on any Apple product but due to decline in sales they have failed to earn such type of margins they had in past. So Hong Kong has stopped the production as that would create bad impact oin business environment.

But still Apple has done an amazing job of promoting their iPad. They have several videos spread around the web in addition to commercials on TV and Radio. They have also sent several iPads to technology reviewers in order to promote the iPad. In the Apple stores every employee carries an iPad and that just shows the visitors of the store how powerful the iPad really is. Apple also uses different ads to target different target markets. For example they have an ad where an entrepreneur talks about how much the iPad helps him to run his business while an accountant talks about the importance of the iPad in his job. This commercial was targeted to the business industry. In the mean time they also have ads showing how iPad can be useful, fun and intuitive for everyone.

Apple thinks more students will carry iPads in class this coming fall and it has got a gift cards to prove it. Apple implemented the technique of awarding a $50 gift card to those who purchase one of the third-generation iPad tablet the company launched last March. iPad 2s, which Apple still sells at a $100 discount, are ineligible. It’s clear that Apple sees the iPad as an increasingly attractive educational tool. Earlier in the year 2012, the company launched educational initiatives centering around its iOS devices, with particular attention paid to the iPad. The Back to School promotion seems like part of Apple’s push to get more of its tablets into the hands of students—and to make sure those iPads are loaded up with apps once class is back in session.

The then Apple’s CEO Steve Jobs used to snatch every chance to talk about how attractive the iPad looks, how powerful it is inside, how it will replace laptops and that iPads are the future of portable computers. This had been another one of Apple’s marketing strategies since Steve Jobs was such an iconic figure among the “tech geeks”, and still is, after his demise.


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