Is Apple Facing Declining Sales in the Tablet Segment?
Apple Prepares for Success with Apple Watch and Upgrade Program
iPad performance is key to Apple revenues
Apple (AAPL) has been a pioneer in the technology, hardware, and storage sector. With the introduction of the iPad more than a decade ago, Apple has outperformed peers such as Hewlett-Packard (HPQ) and Dell. Although more than 60% of Apple’s revenues are generated from the iPhone, the iPad is important as well and contributes approximately 10% of revenues. But in fiscal 2015, iPads were Apple’s worst performing product, with sales declining 23% YoY (year-over-year).
Apple leads in market share for online tablet sales
According to a report from 1010data, Apple has the largest share at 34% of the online tablet market in the last 12 months. It’s followed by Microsoft (MSFT) at 19%, Amazon (AMZN) at 11%, and Samsung (SSNLF) at 9%. The report also states that Microsoft surpassed Apple’s online share in October 2015 for the first time, driven by the introduction of Surface Pro 4 and Surface Book. Market share for Microsoft was 45% compared to Apple’s 17% in October 2015.
Microsoft surpassed Apple even though the average selling price (or ASP) of its tablet was $844, more than double Apple’s ASP of $392. It will be interesting to see how the holiday season panned out for these two companies.
In case you’re bullish on Microsoft, you can invest in the Vanguard Information Technology ETF (VGT). Microsoft (MSFT) constitutes 8.2% of VGT.
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