iPad to keep losing ground until new models arrive

During the June quarter, sales of Apple’s iPads declined fourteen percent from a year earlier. And as Mac and iPod shipments dropped, too, the iPhone stood out as Apple’s lone booming product – the company sold twenty percent more handsets than a year earlier.

Analysts and suppliers now speculate iPad shipments will keep on falling due to stiff competition in the table sector and the aging lineup – at least until Apple’s blockbuster Fallbrings us an iPad 5, a cheaper iPad mini and maybe even a Retina iPad mini…

For instance, Citi analyst Glen Yeung (via CNET) thinks the iPad is “losing ground fast” and projects a seven percent annual decline in September quarter shipments.

As for the fourteen percent decline in June quarter iPad shipments - 14.6 million units soldversus seventeen million units a year ago – that number is “in stark contrast to overall industry tablet growth,” he wrote in a note to clients yesterday.

Nevermind that the current iPads have been out three quarters so they’re tired products.

Yeung expects the iPad 5 and a low-cost iPad mini in the second half of 2013, but doesn’t think a Retina iPad mini is due this year. In fact, Citi previously claimed the device would get delayed amid ongoing manufacturing challenges.

Even the hit-and-miss Taiwanese trade publication DigiTimes last week said an “almost bezel-free” Retina iPad mini upgrade won’t see the light of day until Q1 2014, though the story backpedalled on DigiTimes’ previous October 2013 claim.

In the meantime, Google has just launched its second-generation Nexus 7 with Retina-grade resolution. As if that weren’t enough, a report this morning claimed Amazon has three exciting new tablets in the works, one of them ostensibly besting Apple’s Retina iPad with its 8.9-inch 2,560-by-1,600 resolution screen.

No matter how you look at it, Apple can’t be happy that the new $229 Nexus 7 is Retina-fied because the same can’t be said for Apple’s $100 pricier iPad mini, whose rather paltry 1,024-by-768 screen now looks outdated.

Adding fuel to fire, DigiTimes in a new report today pegged September quarter iPad shipments at 10-12 million units. That’s another data point that indicates a further sales erosion as we approach the end of the current-generation iPad lifecycle.

In addition to seasonal factors and lacking new products, Android-based tablet price-cut promotions also affected Apple’s iPad shipments in the second quarter.

In the first quarter, global tablet shipments were about 50 million units, with Android-based tablets accounting for 27.8 million units, a share of about 50% and iPads accounting for about 40 percent.

According to estimates fromTrendForce’s display research division, WitsView, iPad share in the June quarter dropped to about 30-35 percent.

Reasonable watchers could note that it’s been nine months since Apple updated iPads so decelerating sales are the norm. After all, iPads and iPhones have proven to be prone to seasonal factors.

From my vantage point, Apple may have shot itself in the foot because there would have been many more iPads sold had the iPad 5 launched in April.

While it could fend off competition and improve its market standing by discounting the iPad mini this Fall, Apple won’t see a marked sales improvement until a Retina iPad mini enters mass-production.

Here’s to hoping Tim Cook has not lost its mojo and will tap his supply chain expertise to carpet-bomb the market with refreshed gadgets soon. Otherwise, Apple’s Fall and Christmas quarters could disappoint and you don’t need me to tell you what dire implications this would entail for the company.