back to article iPad? More like iFAD: We reveal why Apple fell into IBM's arms

Apple has been talking up its strong Mac and iOS device sales in its latest quarter – but the real news was a stonking slump in iPad numbers. The Cupertino giant said the three-month period ending June 28 was its best-ever fiscal third quarter on record. It reported revenues of $37.4bn, up six per cent year on year, which led …

  1. Irony Deficient

    the App Store paid out $20bn in revenues to app developers

    In other words, the App Store has garnered $8.5bn in revenues for Apple.

    1. Hyper72

      Re: the App Store paid out $20bn in revenues to app developers

      Ah I remember the good old days where my shrink wrapped boxes of software were sold through retail stores that required 50% or more and reached a limited market. The first time I sold through an online distributor they took 40%.

      Sales from my own website avoided this distribution channel cost but terribly few managed to find it. Ok I'm terrible at marketing, so my fault...

      So I'm happy with the 30% that has pretty much become an industry standard now, it's lower than what was typical before Apple created their App Store. Of course we can always find exceptions but in the general picture...

      1. MalcolmTucker

        Re: the App Store paid out $20bn in revenues to app developers

        Except that under the previous distribution strategy, you had shiny discs so you can re-load software.

        More than once, I've purchased software (and even music) from Apple where the license expired, or in the situation of music (remix or instrumentals), the rightsholder changed; the license to play music was revoked.

        An Apple User can't re-download it without satisfying an OS upgrade; in the AppStore, and the old version isn't downloadable. In the situation of music, it's simply not playable except on a legacy device like an iPod or other non-connected-to-apple device.

        My other issue is with Apple Gift Cards. I have about £300 in gift cards which can't be used to buy apps. Apple's Hedge Fund must love the ability to sit on that money.

        Still, without physical copies of Mac OS available... starting with Lion (10.8)... you're stuck.

        Your not only tied to the Apple ecosystem, but you also have to satisfy OS release requsite requirements. It turns out to be an additional expense on top of already expensive hardware.

        There is some good that may come of this-- IBM owns the patents to the PowerPC emulator called Rosetta, which was removed with Tiger (10.8). Possibly Apple will work out a deal so the next version of OSX will restore the ability to run legacy PPC applications.

        1. Anonymous Coward
          Anonymous Coward

          Re: the App Store paid out $20bn in revenues to app developers

          What are you on about? You can reload apps and music you bought from Apple if you lose your device, buy a new one, temporarily deleted it to make room or whatever. I suppose you can come up with a few examples where something changed and Apple is no longer allowed to distribute it but that's the exception, not the rule (and would equally affect Google Play)

          1. PJI

            Re: the App Store paid out $20bn in revenues to app developers

            Indeed. I loaded, embarrassingly easily, all my apps onto my iPhone 5s when I replaced the old 4s, music from three years earlier too.

            For Lion, at least, one could buy it on a USB stick. Personally I just downloaded it and burnt my own, that has been used a couple of times.

            Why do non osx users or incompetent ones persist in displaying ignorance and prejudice?

  2. Paul Johnston


    "With the back-to-school shopping season kicking off !"

    Mine haven't finished this years yet.

    How much is this going to cost me :-)

  3. PeterM42

    Do Apple know...........?

    IBM means I Bought a Minger, I've Been Misled, etc

    1. Admiral Grace Hopper

      Re: Do Apple know...........?

      Inefficient But Marketable

      Inert Blue Monolith

      I've Been Mugged


      I Bought a Macintosh.

      1. Anonymous Coward
        Anonymous Coward

        Re: Do Apple know...........?

        Or, for employees, International Broken Marriages

        1. Destroy All Monsters Silver badge

          Re: Do Apple know...........?

          YO! The 80s want their wordplays back.

        2. Tim99 Silver badge

          Re: Do Apple know...........?


          Or, for employees, International Broken Marriages

          Or "I'm Being Moved"

    2. Tromos

      Re: Do Apple know...........?

      In my day it was always thought to be "It's Being Mended".

  4. D@v3

    Drop in Ipad sales / saturated market?

    Might be connected to the outrageous idea that once someone has purchased an Ipad (an it seems many people have) They don't go out an buy another one.

    I know several people that are still happily using an iPad2, and have no desire to replace it anytime soon, but they do 'upgrade' their (i)phones every 18 - 24 months.

    I have an ipad4, and am very unlikely to replace it until it breaks.

    I would expect (although this is of course opinion) that there is a massive amount of ipad owners of 'slightly advanced years', that received them as gifts from 'younger members of the family', to cut down on family based support calls. As such, they didn't buy their first ipad, and are quite unlikely to ever buy another one.

    1. dave 93

      Not much to go wrong with a tablet

      Apple kit is usually quite long-lasting, and with virtually no moving parts a well treated iPad will last until the battery dies. If laptops are anything to go by, then five years should be about it.

      The iPad was launched in 2010, with peak sales in 2012-13, we should see the first round of replacements starting next year and peaking in 2017-18.

      Love them or hate them, iPad style tablets are here to stay because people love the form factor, the interaction style and they just work.

      1. Anonymous Coward
        Anonymous Coward

        Re: Not much to go wrong with a tablet

        Apple better have a rabbit to pull out of their hat come 2017-2018. By then, Microsoft's app store will probably be approaching app parity, Windows 9 will have been out for a few years and Windows based tablets will provide serious competition - equivalent ease of use, none of the compromises in capabilities and likely a fair bit cheaper.

        While I know they serve a lot of people's needs as is, I've been seriously underwhelmed by the iPad. It just hasn't gained significant capabilities beyond games and entertainment. Some, to be sure, but not enough to have justified the cost of the device, for me at least.

        1. Anonymous Coward
          Anonymous Coward

          Re: Not much to go wrong with a tablet

          Dream on. Apple's biggest competitor for iPad sales now and in 2018 will be iPads they sold in previous years that still work fine. Their next biggest competitor will be disposable sub $100 Android tablets that people will feel they don't need to take as much care of or worry as much if lost/stolen as a $500 iPad. Surface tablets are and will remain a distant third.

      2. Anonymous Coward
        Anonymous Coward

        Re: Not much to go wrong with a tablet

        But it need not be a tablet made by Apple. With an Apple tablet, you must also have a full computer that runs Windows or MacOSX in order to keep your tablet working. Also, you are trapped in Apple's tiny walled off garden. Sooner or later, someone will come up with a markedly better tablet and Apple will suffer as a result.

        1. Anonymous Coward
          Anonymous Coward

          Re: Not much to go wrong with a tablet

          How do you need a computer "to keep your tablet working"? You can back up to the cloud, load stuff from the app store / iTunes, and update wirelessly. You used to need a computer for backups and updates, but not for a couple years now.

      3. PJI

        Re: Not much to go wrong with a tablet

        Going by MacBooks, I should say more like at least seven years. Mine is still going strong so it may be longer. iPads with mo moving disc cylinders and no hey air should last even longer. People do seem to be content with them without feeling the need to replace them. I have not got one, yet.

    2. Anonymous Coward
      Anonymous Coward

      Re: Drop in Ipad sales / saturated market?

      Bang on.

      I'm still using my iPad 1 - it gets used daily on my commute, and basically is as good a new and still has a week-long battery life.

      The only reason I may consider an upgrade is that they's stopped providing iOS updates for it, so some new apps don't work if they require iOS-latest. However, given the price of a new one I really can't justify it, and I don't want to encourage companies to stop supporting perfectly functional hardware =) Given that most apps work on the current one just fine and the hardware is basically in perfect condition, an upgrade just seems like spending for the sake of it.

      1. Wibble

        Re: Drop in Ipad sales / saturated market?

        Totally agree.

        My iPad 1 with 64GB runs pretty much all I need. I'd like to upgrade, but the later iPad versions don't offer anything substantially different from what I've got. Sure, they're lighter, faster, better screen, but nothing *trully* compelling.

        If the next iPad has the fingerprint sensor, that might make it worth the upgrade, but it's still an awful lot of dosh for fundamentally incremental improvements.

        Quite frankly, it's the same for the MacBook Pro. I've a three year old 17" one and the latest versions have no compelling update: the CPUs are a few percent faster and the screens are great, but counteract that with the smaller screen (17" vs 15"), they're massively more expensive, they've no built-in DVD reader, you can't upgrade the disc or memory...

    3. Nifty Silver badge

      Re: Drop in Ipad sales / saturated market?

      Spot on, my over 80 father in law will not be parted from his iPad 2.

      And when I replaced my iPad 2 with an iPad mini, the iPad 2 fetched a very decent used value on Ebay thus reducing the market for new sales. Whoa, this almost looks like a respectable maker of tablets!

    4. Mage Silver badge

      Re: Drop in Ipad sales / saturated market?

      The iPad also seems expensive.

      1. Anonymous Coward
        Anonymous Coward

        Re: Drop in Ipad sales / saturated market?

        It has a good resale value and a good recycling value.

        I got £97 at a phone recycling site for my iPad 1. Yet a Nexus 7 is worth bugger all even if it's new.

        1. Sorry that handle is already taken. Silver badge

          Re: Drop in Ipad sales / saturated market?

          It has a good resale value and a good recycling value.

          I got £97 at a phone recycling site for my iPad 1. Yet a Nexus 7 is worth bugger all even if it's new.

          So the difference in retail price is still more than the difference in resale?

          Buying consumer electronics is not an investment.

    5. RCharles234

      Re: Drop in Ipad sales / saturated market?

      As a long time Apple and Macintosh fan I am underwhelmed with the iPad. I replaced my iPad 2 only because the glass was seriously fractured. Now have an iPad Air, will take better care of it and have no plans or interest in an upgrade. Frankly, I had expected to use the iPad as a portable and keep my contacts and calender synched with my MacBook Pro but Apple shut down the wi-fi path to doing that and insists on iCloud, which I will not use. So for me some iPad functionality, which was not great to begin with, is now gone. Mostly I use it to read magazines, take pictures, and occasionally do email while out. I've bought maybe $50 worh of Apps and mostly avoid them.

      1. Snapper

        Re: Drop in Ipad sales / saturated market?

        You do know they've put wifi syncing back, don't you?

    6. NPCO543

      Re: Drop in Ipad sales / saturated market?

      Saturation is likely a big part of it. Combine that with a lack of new features or apps that demand more advanced hardware, and you have a repeat of pretty much exactly the same cliff the PC industry went over.

      I see no reason for the foreseeable future to replace either my smartphone or mobile tablet. And to be completely honest, unless the inherent limitations of mobile OS based tablets are eliminated, I wouldn't purchase another one period. I bought a Surface Pro 2 last year, and it's so inherently more capable and useful, I just don't see any value in lesser tablets. Their capabilities are just too compromised.

  5. Phil_Evans

    Doe not compute.

    I'm still scratching my head on this one. What does IBM want with the iPad? Or maybe this is code for a new device that plugs to other 'enterprise' stuff.

    Lenovo have made a bit of a splash with the Yoga in the enterprise, so is this a look back in anger at the premature disposal of the consumer computing business to the same some years ago?

    Are we going to see a TTY emulator for Z/OS from Big Blue on the iPad real soon?

    1. Peter Gathercole Silver badge

      Re: Doe not compute. @Phil

      Strictly speaking it would be a 3270 emulator. A 'glass TTY' is normally regarded as an ADM3, Wyse 50 or VT100.1

      I'm surprised TN3270 is not already available. There's several versions in Google's Play store for Android.

      1 Other terminals used to be available!

  6. HKmk23

    One does not replace the Rolls every year!

    Neither the Ipad it seems. Apple are hoist by their own petard here, when you buy something manufactured so well, there really is no need to replace it every year, especially when the manufacturer replaces the engine and re-upholsters it on a regular basis!

    Now those cheap and cheerful phones with almost no upgrades (Android are you listening?) have become a disposable item.......!

    1. Gordon 10

      Re: One does not replace the Rolls every year!

      I'm sure apple are more than big enough to take the long term view on upgrades. They certainly do with their Mac's. If its one thing Apple have been better at in general than pretty much any other Tech company its customer retention and loyalty.

      1. RCharles234

        Re: One does not replace the Rolls every year!

        Sorry but I disagree. Apple was agreat company focused on excellent products and loyal to it's customers. Now it seems focused on becoming bigger and has gradually failed to keep it product quality.

        I'm an Apple and Macintosh fan for 30+ years but have grown frustrated with recent trends. For example, there are occasional problems with OS X that, if one searches the web for help, have been around in various forms for many years; in the old days Apple would find the "root cause" and fix it for good but now these problems are patched and routinely re-surface. Secondly, apply designed the iPad to be totally locked and dependent on iTunes; when I bought mine you had to have an Appl ID and iTunes just to get started. And the OS-X to IOS interface is useless. My goal was to use the iPad as a portable device and l=keep it synched with my Macbook Pro; that was marginally possible with the earlier iPads but now Apple insists on the iCloud as the only way to synch these two devices. So I've bought my LAST iPad.

        1. Anonymous Coward
          Anonymous Coward

          Re: One does not replace the Rolls every year!

          They listened and restored local wifi or USB sync a while ago. I'm not clear how having the largest number of apps makes the garden tiny. You sound like yet another incompetent user.

    2. AndyMulhearn

      Re: One does not replace the Rolls every year!

      HKmk23: Now those cheap and cheerful phones with almost no upgrades (Android are you listening?) have become a disposable item.......!

      There are a few honourable exceptions, the Moto and Nexus ranges, where the degree of customisation by the vendor is either non-existent or so small that it upgrades are relatively low cost and they do actually arrive. My Moto G went up to 4.4.4 last night with no problems at all and the nexus 7 a few weeks back.

      By and large you're completely correct in terms of upgrades although the fact that a phone doesn't receive the latest version of Android OS doesn't mean it stops working overnight, witness the number of people around still using devices running gingerbread.

  7. A Butler

    Ipad only a content consumption device

    The limitations of the iPad are becoming apparent its basically a content consumption device, useless for creation.

    Plus I see it with my grandmother the apple walled garden makes simple tasks like archiving all your photos to local storage, in cases where its your only device its a bit of a pain. Its still only a secondary device, where you need a PC (whatever OS) or Mac as your primary device.

    For once the Reg headline has it spot on iFad.

    1. Steve Todd

      Re: Ipad only a content consumption device

      And here we go with the tired old tropes. The iPad isn't good at creating SOME types of content, while being excellent at others. MOST users aren't big on content creation so that hardly matters for them.

      As for backup, that's been possible to the cloud since (IIRC) iOS 6. If your machine dies you get it repaired or replaced, log in with your iTunes account and everything is back.

      You sound like the old mainframe guys who complained that, if a microprocessor broke, you wouldn't be able to repair it. Just because it doesn't fit the way that YOU work, or behave in ways you're used to doesn't mean that there isn't a market for it.

    2. plrndl

      Re: Ipad only a content consumption device

      The number of people who consume content is many orders of magnitude greater than the number who create it. A modern PC is massively over-specced for the vast majority of users.

      1. Anonymous Coward
        Anonymous Coward

        Re: Ipad only a content consumption device

        Sadly a modern PC does help for modern websurfing. It can be quite demanding, as you'd know if you could experience the horror of doing your daily browsing on the old Win XP laptop I still use from time to time! It's not too bad most of the time, but plenty of popular sites slow the thing down to an irritating crawl - even with NoScript and AdBlock helping out.

    3. Anonymous Coward
      Anonymous Coward

      Re: Ipad only a content consumption device

      Depends what you're creating. David Hockney has done numerous pictures with his.

      They're also used for mobile music creation or as control pads for live music performance.

    4. John Robson Silver badge

      Re: Ipad only a content consumption device

      Is that why my wife wrote her last book on an iPad?

      (Oh, and that's an iPad2, which isn't getting replaced any time soon)

      If getting a contract to write a book, and then fulfilling it isn't enough to count as content creation then heaven help us.

      The only thing you need to make a tablet a content creation device is a halfway decent keyboard.

      Whereas a PC needs, Oh, a keyboard to be useful. erm, that'd be the same keyboard you use with the tablet then (yes we use the same keyboard on the PC (acquired since the book was published) as with the tablet - I have a spare sat near the PC for when the normal one is "out on business")

      OK then, they need proper software. Erm... Apple sells it's word processing software for iOS and OSX?

      Personally I think the PC is dead for most people. There are very few things you can't do with a tablet. Our list:

      - iPod classic management ('though Apple could enable that)

      - GPS dongle downloads (gpsbabel on android is close though)

      - DVD backups/format shifting (and actually I suspect the android could do that, albeit slowly)

      1. Anonymous Coward
        Anonymous Coward

        Re: Ipad only a content consumption device

        Your wife wrote a book on an iPad? I sure hope she used a keyboard cover, if not was it titled "how to use the wrong tool for any job?" :D

        Tablets in general are not intended for content creation, that includes Surface. Yes you can use a keyboard on Surface and have it act mostly like a laptop, but in that case, why not get a laptop? Keyboard covers have been available for iPad and Android tablets since well before the Surface came out, but only a fraction of people buy them (similar to how only a fraction of all tablet sales are Surface) That's because few people buy a tablet intending to create content, John Robson's wife is the exception rather than the rule.

        Most people are content consumers, not creators, and for that a tablet is a better solution than a PC for many.

      2. Anonymous Coward
        Anonymous Coward

        Re: Ipad only a content consumption device

        "Personally I think the PC is dead for most people. There are very few things you can't do with a tablet. Our list:"

        Your needs are very modest if a tablet does everything but the 3 items on your list. Now I'm not saying an iPad can't handle most of most people's needs, but that's very different than suggesting they essentially do most everything that people might use a PCs for. They simply don't.

        As for your wife writing a book on an iPad... yea, that would require more details to be taken seriously. A "book" can vary considerably. Someone I know bragged about writing a book on his smartphone, which I later came to find out was a single "chapter" consisting of maybe a half page in someone else's book. While someone *could* write lengthy pieces on an iPad, you can't seriously suggest it's an optimal or efficient device for doing so.

        Among the glaring deficiencies of iPads and Android tablets are:

        -Web browsing is still frequently compromised.

        -Typing with the on-screen keyboards is a pretty horrible experience.

        -Storage capacity is severely limited

        -File management is somewhere between terrible to non-existent.

        -Network access/sharing (beyond simple internet access) is limited to non-existent.

        -File syncing between a tablet and a PC is terrible, frustrating and limited.

        -Device longevity/useful lifespan is a fraction of what a PC is.

        -Essentially locked to the form factor - ~10 inch screen.

        And this is before even touching on the limitations of apps vs. real desktop applications.

        Again, an iPad might serve your needs just fine, but the PC is still alive and well and in no danger of being put out to pasture.

        1. Anonymous Coward
          Anonymous Coward

          Re: Ipad only a content consumption device

          No one is suggesting the PC will be put out to pasture, only that it has seen its sales peak because for a lot of average people who only consume content a tablet or smartphone serves their purpose perfectly well and they no longer have any need for a PC.

          No one is suggesting pulling the PCs out of your or my cold dead hands.

  8. damian Kelly

    Got to stick me in the me too category. Bought an iPad 3 (because I was not going to get a beta product this time round) and I imagine it will last about as long as a laptop. I surf, read magazines and books play the current zynga/facebook game and see no reason to upgrade.

    Phones tend to get upgraded every 2 years because they seem to loose battery and have a harder life. And because it doesnt cost me anything of course :-)

    1. DiViDeD

      "Phones tend to get upgraded every 2 years because they seem to loose battery "

      I dunno about that. My old Dell Streak is still going strong (as a backup PAYG) and as far as I can see, the battery is no looser than it was when it was new - still fits snugly into its little receptacle and shows no tendency to rattle around when the device is in motion.

      Maybe I just got lucky and happened to get one of those new, 'non loose' batteries.

      Hope I never lose it.

  9. jnffarrell1

    iPad's iFad niche has gone

    Apple never knew how to do personal assistance and Now that Google's voice recognition, collaboration, security, productivity, Maps, Search, Browser, Social .... Apps are better, along comes Intel with efficient chips that don't burn your lap, don't make you plug in your laptop for a full day and don't make you attempt to type on a kluged up keyboard, Apple's laptops, Samsung's laptops, Google's Chromebooks, Lenovo's PC's, HP's PC's will all outsell iPads.

    Once Intel started building chips that do not offend user sensibilities iPad's niche was gone. Moreover, iThings were crippled by their lack of personal context, AI/big-data context, and plays-well-with-others cloud-features. IBM can supply those features, so can MS, Google and other's who have building an open, thin-client heaven, while Apple's ecology has been taking Candy from babies.

    1. Mage Silver badge

      Re: iPad's iFad: Intel irrelevant.

      Tablets are in the Mobile or PC category?

      Intel is 85% down on Mobile and 5% to 6% up on PC/Server

      Intel got kicked out of Routers, Set-boxes, TVs etc. Intel are irrelevant to tablets. Actually there will be a Mac Book Air based on ARM. Apple goes for what gives them the best revenue. They have used 68000, Power and x86.

    2. Steve Todd

      Re: iPad's iFad niche has gone

      Intel chips are still not competitive on power, and in particular on price when you factor in the support chips needed also. ARM based solutions can be tailored to contain all the IO and support chips required, thus minimising system cost. There is also no longer the demand for backwards binary compatibility (back in the days of DOS there was a lot of hand crafted assembler that was hard to port, most software these days just needs a recompile to run on a different CPU). Intel are in trouble here, in the same way that the makers of exotic mini hardware were in trouble. ARMs may not be quite as fast, but they are much cheaper and good enough for a lot of work.

  10. Alan Denman

    Percentages percentages

    SO what percentage are books, what are music downloads and most important of all, what is the in-app purchase percentage of actual app buys?

    Lack of info suggests in-app buys earn Loadsa Dosh from a few suckers.

  11. Alan Denman

    The Fad Pad

    It got that name at birth.

    As long as people like me shout its name people will keep buying it.

    Filofax filofax filofax.

  12. Anonymous Coward
    Anonymous Coward

    The reason why is

    Apple killed the iPad 2

  13. OneFisch

    iOS 8 still supported on iPad 2nd Generation

    Tim doesn't need to fret about declining iPad sales. As soon as he makes the call to discontinue support of future versions of iOS (I'm thankful he has not), you will see the uptick in iPad sales. From a user perspective it increases my opinion of Apple that I can still use the $500 device I purchased only 3 years ago.

  14. SeanGenung

    Great products don't need to be replaced often!

    Of course there is a Slump my Nephew uses my iPad Original (ordered on day one), My Brother in law my iPad 2 (bought on day one) and I am happy with my 3rd generation (bought a few months after release for a development project that need the high res), they all still run well, they don't need to be replaced as often as a phone for that matter I doubt I will upgrade from mine or my wife's iPhone 5 to a 6 because that is running real well too. So I guess some who only look at todays bottom dollar would preach doom and gloom but, I will never buy an android and there is no need to upgrade a product that just works GREAT. The next Laptop I buy will be an mac book pro (again), the next desktop I buy will be an iMac 27" (again) and all of my mobile devices are Apple as well with no plans to change that either. Apple will be fine those people buying new devices every year can waste their money any way they want, while I get some real use out of my Apples.

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