Apple has made no secret about its preference for the iPad as the platform for future. “This is the way we think that personal computing is going,” said Phil Schiller, senior VP of worldwide marketing, at the company’s product event in Cupertino, California, on Monday (March 21).
That future may be further off than Apple might like. Schiller went on stage to promote the new, smaller iPad Pro, the latest iteration of a product people have not bought in numbers anywhere close to those like the iPhone (230 million sold in 2015).
At just 50 million units last year, iPad shipments were way down from their 2013 peak of 74 million devices and 63 million in 2014. Revenue growth for the iPad also fell about 20% in the final quarter of 2015 compared to the same period a year earlier.
The far more expensive Mac, meanwhile, is seeing growing sales and market share (21 million were sold in 2015), but wasn’t even mentioned at Monday’s event. Instead, Apple pushed the new iPad Pro as the “ultimate PC replacement,” capable of convincing millions to trade in their laptops for tablets.
With all the sales data pointing the opposite direction, what gives?
For one thing, newer phones are probably stealing some of the oxygen in the room as they’ve grown larger (phablets) and more powerful. Hardware boundaries are also blurring. For instance, Windows laptops now sport removable touchscreens and thinner profiles, making them similar to tablets. Software is in transition as well: OSx and iOS share code and features, and Microsoft’s new Windows 10 supports the Surface tablet, but neither mobile operating system offers the full functionality of a laptop just yet.
Apple has the cash—$216 billion, in fact—to play the long game. Apple wants a bigger slice of Windows’ still-massive market share (90% of global installed operating systems, according to Net Applications).
To do this, it needs to convince millions of Microsoft customers, especially IT departments running Windows, that the iPad Pro is a superior product that’s worth the trouble of adopting a new operating system. Apple hustled out two such customers—Citigroup and the animation studio Pixar—in Monday’s announcement to illustrate that point.
Apple is salivating at what it calls the opportunity to replace 600 million PCs more than five years old. And the steep decline in PC sales since 2012 suggests an opening does exist. Gartner reported in January that year-on-year PC shipments had dropped 8.3% in the final quarter of 2015, the lowest since 2008.
Now, Apple just needs to convince customers that tablets are the future, and the future is now.