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Later this month, Apple (NASDAQ: AAPL) should present updated versions of its iPad Pro tablets. The devices should be radically redesigned compared to their predecessors, with sports displays featuring significantly smaller housings and the elimination of Touch ID (and the Home button) in favor of facial recognition technology. the company, known as Face ID, which debuted. in the iPhone X from last year.
The devices will certainly receive a lot of press. Frankly, it will probably be great products that could give a boost to the company's iPad business in the coming quarters. However, before getting as well excited about these new iPads and the effect they could have on the business, it's helpful to understand how much not important iPad product category is the overall financial performance of Apple.
Source of the image: Apple.
Small and smaller
Apple's iPad activity peaked in fiscal 2013, with unit shipments totaling more than $ 71 million and sales of $ 32 billion. That year, the iPad accounted for about 18.7% of the annual business turnover of the company.
In the years that followed, however, Apple's iPad activity saw a series of unit shipments and lower revenues. When Apple released its results for fiscal 2017, it announced that it sold just under 43.8 million iPads, generating a $ 19.2 billion business figure. Apple's iPad business accounted for just under 8.4% of the company's business turnover that year.
While Apple does not publish the full results of its 2018 fiscal year before Nov. 1, iPad activity has become even less important over the first three quarters of the year. Although Apple saw a 2% increase in iPad business over this period, its overall business turnover grew at a more robust rate of 15%, thanks to the iPhone market recording a 15% growth in revenue, to a 27% growth in the service and product market "(including Apple Watch, AirPod, HomePod, etc.) up 37%.
iPad accounted for just under 7.3% of the company's revenue in the first three quarters of fiscal 2018, down from the 8.1% recorded in the first three quarters of the year. of the 2017 fiscal year.
Reward, iPad has not been the fastest growing business of Apple during this period. This honor was awarded to the Mac division of the company, which saw its turnover decrease by 3% in the first three quarters of fiscal 2018. (This, Apple's Mac sector has always generated a turnover more absolute than the iPad sector.
Should investors care?
It goes without saying that Apple would benefit from having an annual business turnover of nearly $ 20 billion for the iPad rather than not having it. The iPad is also an important part of Apple's global computer ecosystem. That is why investors should expect that Apple continues to invest in building new hardware for iPad, by developing the ecosystem of iPad applications and by working on increased adoption of the iPad in various sectors.
If Apple manages to maintain at least the stability of its activity on the iPad, this will in no way jeopardize the revenue growth generated by its other activities. And if Apple could really put this company on a growth path – even if that growth was modest – it would be even better.
That said, I simply do not think that the performance of the iPad sector is, or should be, at the forefront of investor concerns – nor should it affect the long-term prospects of the company.
Ashraf Eassa does not hold any of the shares mentioned. The Motley Fool owns shares and recommends Apple. In January 2020, he calls 150 USD on Apple and in January 2020, 155 $ on Apple. Motley Fool has a disclosure policy.
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