Jul 212015

The critics and analysts are shouting themselves hoarse that the sky is falling vis-a-vis sales of Apple’s iPad tablets.

Tis’ true that Apple’s fiscal 3Q of 2015 witnessed the sixth consecutive quarterly decline in iPad sales.

iPad unit sales tumbled to 10.9 million units, a 13% decline over the previous quarter and down 19% year-over-year.

But keep in mind that iPad revenues in the third quarter of 2015 amounted to $4.54 billion compared to $3.6 billion for Microsoft for the full fiscal 2015.

Apple Still Way Ahead

The falling iPad sales come amidst a global slump in tablet sales.

Major market researchers including IDC and BI Intelligence agree that global tablet sales have hit a wall. What limited growth is there in the tablet arena now comes from generic, low-cost devices and not from Apple, Samsung or Asus.

Amid the hand wringing over falling iPad sales, few critics seem to understand or care that Apple is still way, way ahead of Samsung, Microsoft and everybody else in the tablet game.

The 3Q of 2015 is considered to be the worst quarter for iPad sales in recent years and yet Apple’s tablet numbers dwarf that of Microsoft and every other leading tablet brand.

Microsoft’s fiscal 4Q 2015 (which corresponds to Apple’s 3rd fiscal quarter) is considered to be its best quarter for Surface sales. Still, Surface revenues remain a mere 20% of Apple’s revenues from iPads for the same period.

In Microsoft’s fourth fiscal quarter, sales of Surface tablets came in at $888 million amid multiple rounds of discounts and heavy marketing.

Apple’s revenues from iPad tablets in the fourth quarter alone is higher than Microsoft’s Surface revenues for the full 12-months in the company’s fiscal 2015.

Microsoft has not disclosed unit sales of Surface for the quarter but it’s safe to assume it still won’t make it to the list of top five tablet vendors.

Further, neither Microsoft nor analysts have cared to explain how Surface tablets bucked the trend of slowdown in tablet sales and registered a 117% jump (albeit from a low base) to $888 million. Where did the sales come from? Consumer or business?

Another question that comes to mind is whether the Surface business has turned profitable for Microsoft given the high marketing spend and repeated discounts.

Three years after Microsoft launched its first Surface tablets, their sales are still insignificant and, more importantly their long term presence in the market remains in question.

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