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Apple Inc. Learns a Big iPad Lesson

By Ashraf Eassa - Jan 24, 2016 at 9:30AM

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Better products sell better -- a true shocker!

In 2014, Apple (AAPL 0.03%) launched two iPads. The first was the iPad Air 2, which brought a number of significant enhancements to the original iPad Air. It was thinner, lighter, more powerful, and even included the Touch ID fingerprint sensor that proved indispensable in the 2013 iPhone 5s.

Alongside this new iPad came the iPad mini 3. The only real change that it brought from the iPad mini 2 was the inclusion of Touch ID (and, if you want to get really nitpicky, Apple also added in an additional color option, gold).

This was a surprising and, frankly, lazy move on Apple's part.

However, it finally made good on the utter fail that was the iPad mini 3 with the iPad mini 4, giving the device an all-new industrial design, revamped internals (processor, Wi-Fi, etc.), and an extremely high-quality LCD with 100% sRGB color gamut coverage (iPad mini 2/3 only covered 62% of sRGB).

And, it would seem that making a much better iPad has had a positive impact on sales of the company's latest "mini" iPad.

Quantifying this impact
According to a survey conducted by CIRP (via Apple Insider) showing adoption rates of various iPad models in the United States, iPad mini 3 adoption in Dec. 2014 was quite low, with iPad mini 2 and iPad mini adoption each dramatically outstripping that of the iPad mini 3 (which seems to have made up just over 5% of iPad sales at that time).

However, the Dec. 2015 numbers tell a very different story. iPad mini 2 is still the most popular iPad (which makes sense given its price point), but unlike with the mini 3 last year, iPad mini 4 has seen quite strong adoption (relative to the other iPad models), making up -- from what I can tell eyeballing the chart -- about 15% of overall iPad sales in the U.S.

Better products are better (duh)
Apple has the financial might to invest in developing new iPad models each and every year. And even though it's on the decline thanks to cannibalization by large phones, iPad is still quite a significant revenue generator for the iDevice maker.

In order to even have a chance of stabilizing iPad and/or seeing it return to growth someday, Apple can't let its foot off the gas with respect to product development.

I believe that the major high-end mobile device vendors have largely decided to neglect the tablet market, so Apple doesn't face anywhere near the competitive pressures that it does in smartphones. However, in order to compel current iPad owners to buy new ones (and to convince owners of older non-iPad tablets to ultimately refresh to iPad), it will need to continue to bring meaningful innovations to all of its iPad lines -- mini through Pro -- at roughly an annual cadence (give or take six months, since this isn't the fast-paced world of smartphones).

These innovations don't need to be as sweeping as the ones that Apple brings to its iPhones -- iPhone is much more important than iPad -- but the company really needs to avoid pulling the incredibly lame stunt that it tried with the iPad mini 3 again for the good of both its customers and its shareholders.


Ashraf Eassa has no position in any stocks mentioned. The Motley Fool owns shares of and recommends Apple. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.

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