Who’s afraid of the iPhone cannibals?


Why should Apple care when iPad users are simply switching to other Apple products? 

Apple chief executive officer Tim Cook says that the iPhone 6 Plus with its 5.5 inch screen is “cannibalising” sales of the iPad range but it’s doubtful the world’s richest tech company cares that much.

His comments came after the company posted its lowest Q2 iPad sales in three years shifting a ‘mere’ 12.6 million units.

This was down from 16.4 million a year previously,a huge fall from 2013’s like-for-like figure of 19.5 million and the lowest since 2012’s 11.8 million sales.

Yet,one thinks that Apple chief financial officer Luca Maestri is hardly being kept awake at night by the slump in iPad shipments. Especially (as Cook claims) they are simply buying other Apple products such as the iPhone 6 Plus.

iPhone sales in that time have soared with the company selling 61.2 million in the latest quarter,an increase of 18 million on last year.

In 2012, Apple was selling ‘just’ 35 million iPhones a quarter. Its revenues also tell the story of how it is not feeling the pinch of a decline in iPad sales.

In 2012,iPad revenue was $6.3 billion of its $39.2 billion revenue, in 2015 it was $5.4 billion of $58 billion.

In February,the company also became the first company ever to be worth more than $700 billion – it has a market capitalisation more than double that of any other company and its Q1 profits of $18 billion were another world record.The iPad, while important to the company, is not crucial to the bottom line.

Add in that margins for the iPad are reportedly 38 per cent compared with in excess of 50 per cent on iPhones and you can see that the company executives will be sleeping soundly.