Along with a lower operating margin, a miss on gross revenue estimates for Q4, 2013, and weaker Mac sales, Apple’s Q4 2013 quarterly report included mention of a substantial miss of 6% against estimated iPad sales. Analysts estimated 15 million units sold for this product, but Apple sold 14.1 million units. Q4 2013 marks the second consecutive quarter of a miss on this product line. In Q3 Apple sold 14.6 million iPads.
What bearing, if any, do weaker iPad sales have on the market for PC computers? While I don’t want to veer into an attempt to correlate sales of these two products, I do have some thoughts on the topic. The lower than expected drop in PC chip sales reported by Intel, Microsoft’s report of better than expected sales of their PC O/S, together with this reported drop in tablet sales are worth strong consideration. I’m confident there is a floor for PC sales (there are some applications requiring PC computing power. These applications cannot be replaced, at least for the near future, so they can safely be considered part of the “flooring” below PC computer sales). I wouldn’t be surprised to see some reports of an uptick in PC computer sales in coming quarters.
As I wrote earlier, supporting the iPad with a 64 bit O/S is, in my opinion, overkill. There is no need for a 64 bit O/S when most consumers will use the device to watch video, or to listen to music. One can argue there is a rationale for 64 bit O/S for gaming, but the proportion of the consumer market buying tablets to play high end video games is not likely to be substantial. So I do not hold the opinion the 64 bit O/S will make for a substantial improvement in sales of these products anytime soon.
I would look more favorably on Apple opting to service the lower end of the tablet market with a device at a price accessible by consumers in emerging markets. But this type of move doesn’t look to be in the offing anytime soon.
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