AAPL iPad Sales Are Down: How AAPL Can Fix the iPad 6

Apple (AAPL) reported its Q2 earnings after the bell Wednesday, and one of the company’s biggest lines of business is struggling: iPad sales are down, off 16.4% compared to a year ago. That’s despite the recent introduction of the iPad Air and the new iPad Mini with Retina Display and a lower price for the previous generation iPad Mini — $299, the lowest price ever for a new iPad. With the tablet business representing Apple’s second-largest product line (once accounting for 20% of revenue), AAPL needs to turn it around when the iPad 6 is introduced this fall.


What would I do if I were APPL? Simple. Introduce mouse support.

Every generation of iPad from the 2010 original to the 5th generation iPad Air has stuck to the Apple mantra of keeping things as simple as possible. That means sticking to the familiar touch controls and keeping files hidden within apps. When using the iPad as a casual-use device, the approach works well.

But it can be an exercise in frustration to use one of Apple’s tablets to try to get serious work done — and the iPad 6 will suffer the same shortcomings no matter how thin, fast or high-resolution it is.

With consumers holding onto the iPads they already own for longer than ever, increasingly opting for cheaper “good enough” tablets when they do upgrade or simply choosing a phablet instead, much of AAPL’s future tablet growth is expected to take place in the business market rather than the saturated consumer market.

However, when it’s released, the iPad 6 will be going up against Microsoft (MSFT) Surface tablets that run Windows 8 complete with full mouse support and the ability to access Windows 8’s file directory. Tablets running Google’s (GOOG) Android also accept mouse input.

At the same time, competitors like Samsung (SSNLF) are actively targeting enterprise users with security software, sandboxing (separating personal from business environments on the tablet) and remote PC file access.

Apple has the advantage of momentum — iPad sales to enterprise have significantly outpaced the competition — and having Microsoft release an iPad-optimized version of its Office productivity suite certainly doesn’t hurt. But without mouse support, the iPad is at a disadvantage and AAPL is likely to see its head start erode, just like it did in the consumer market.

I’m not trying to pick on the iPad. I’m a fan, and while I own a few Android tablets, there are seven iPads kicking around my house. I have an iPad Air and iPad Mini with Retina Display and I’ll undoubtedly buy the iPad 6 when it’s released. But I make my living through writing and research — and much as I love an iPad for web browsing or playing a quick game, trying to work using one is something I’ve learned to avoid.

A Bluetooth keyboard does wonders for making touch-typing faster than the iPad’s virtual keyboard, but without mouse support, every cursor insert or selection means reaching over and having to select text by touch. It takes too long, it’s uncomfortable and it’s imprecise. Apple’s hidden file scheme in iOS also hurts productivity, but it’s not nearly as bad as the lack of mouse support.

Working on one of Microsoft’s Surface 2 tablets is a joy in comparison.

AAPL has already caved to the reality of mobile gaming — namely, that touch controls aren’t the best for all games and fare especially poorly as a replacement for a joystick in arcade-style games. So iOS 7 included official APIs for adding physical game controller input, and accessory makers like Logitech (LOGI) have begun churning out controllers for iOS devices.

There’s no reason Apple couldn’t also introduce an API to support mouse input (for both legacy iPads and the new iPad 6 when its released), especially if the move could help boost iPad sales to enterprise customers. Like the game controller API, if you enjoy using touch input on your iPad, the ability to support another input has no impact whatsoever on your experience. So casual tablet users lose out on nothing, while power users would gain the ability to realistically consider the iPad 6 as an ultra-compact and relatively inexpensive laptop replacement.

I could live with using an iPad 6 as my next mobile work machine if it came loaded up with Office (check), a Bluetooth keyboard were available (check) and it supported mouse input (better file handling would just be a bonus). Two out of three is a start, but it’s not good enough. Until AAPL introduces mouse support with the iPad 6, it risks losing the head start it built in the enterprise world and faces iPad sales that will continue to slide instead of taking advantage of increased business interest in tablets.

As of this writing, Brad Moon did not hold a position in any of the aforementioned securities.

Article printed from InvestorPlace Media, https://investorplace.com/2014/04/aapl-can-fix-ipad-6/.

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