Is It an iPad Christmas After All?

"It's going to be an iPad Christmas," Apple (NASDAQ: AAPL  ) CEO Tim Cook predicted during the company's fourth-quarter earnings call. Data from two recent studies seems to back Cook's statement with impressive data.

The evidence of a likely iPad Christmas
One of the first indications the iPad was seeing healthy sales this holiday season was soaring sales of the iPad Air on black Friday weekend (including Cyber Monday). Localytics data suggested sales of the iPad Air soared 51% from the previous weekend. That's nearly double the growth of any other new device Localytics tracked during the period. In second place was Apple's first-generation iPad Mini, with 26% growth from the previous weekend. Only four tablets made it into the top six spots, and three were Apple's. The new iPad Mini took sixth place and the heavily discounted Kindle Fire HD 7-inch tablet took fourth.

The most recent evidence of robust iPad sales this holiday season comes from data collected by ChangeWave. The new report, acquired by Fortune, should be taken with a grain of salt, however. Fortune author Philip Elmer-Dewitt explains:

ChangeWave's 25,000 members tend to be early adopter types, richer and more tech savvy than the general public. But their survey responses have proved in the past to be pretty good forward indicators of where the U.S. market is headed.

Of the 2,480 surveyed members, 72% of those who planned to buy a tablet said that they are going with an iPad. Elmer-Dewitt notes that 72% is "a 17% surge since August." And that's on a base of 13% of total surveyed members who plan to buy a tablet -- a level that is comparable to the holiday season in the previous two years.

Apple's growth in interest went unparalleled in the survey. The results indicated a decline in the interest for Samsung's Galaxy tablets, Google's Nexus line, and Amazon.com's Kindle Fires. The only manufacturer to see a slight gain in interest was Microsoft's Surface, rising from 7% share of tablet interest in August to 8% going into the holidays.

iPad Air.

Higher-margin iPad sales?
Even more interesting, it looks like the composition of iPad sales this holiday season could lean further toward the larger iPad than sales did last year. According to this data from ChangeWave, 55% of the users who plan to buy the iPad are planning to buy the iPad Air. Comparatively, only 16% plan to buy Apple's new iPad Mini with Retina Display and just 5% plan to buy the first-generation iPad Mini. Last year the composition of iPad sales was far different -- at least according to one estimate from Canalys. In Apple's fiscal Q1 of 2013, Canalys estimated that Apple's iPad Mini "made up over half of Apples total pad shipments."

If Changewave's survey results are a meaningful indicator of the composition of Apple's iPad sales, the change in composition would be good for Apple's top and bottom line. Not only is the average selling price higher for the iPad Air, but it's also rumored that the iPad Air actually boasts higher margins than the third-generation iPad. Even more, it's no secret that the first-generation iPad Mini put significant pressure on Apple's gross profit margin. In the company's fiscal Q1, Cook elaborated: "the iPad Mini gross margin is significantly below the corporate average."

A massive iPad quarter
A solid quarter for Apple's iPad segment looks as likely as ever, with the data from these two studies. Not only may unit sales in the segment be robust, but these iPad sales may also be trending toward units with higher average selling prices and higher profit margins, too. As Cook predicted, it may be an iPad Christmas after all.

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  • Report this Comment On December 15, 2013, at 2:29 PM, johnestromjr wrote:

    While all Apple shareholders are looking forward to seeing Tim Cook's prediction of an iPad Christmas there is one more holiday that may bring good cheer to shareholders. China Mobile is due to announce they've joined Apple and will sell Apple iPhone [and iPads too, I hope] If they do then December 18th is probably when that will be officially announced. Between Christmas and Chinese New Year on January 31, 2014 it could be very good Q1 and Q2 for Apple.

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