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Apple's iPad professionals and Mac options should let investors scratch their heads – Apple Inc. (NASDAQ: AAPL)

Apple's (NASDAQ: AAPL) latest revisions of its iPad and Mac lineups are always met with a good press. Most articles…

Apple’s (NASDAQ: AAPL) latest revisions of its iPad and Mac lineups are always met with a good press. Most articles and reviews are related to what the company changed or updated. It has never been a secret that Apple’s products target a large audience. However, the latest updates seem to have intensified this game. Apple only took iPad Pro and Mac lineup to ultra-premium status. The question investors need to answer, was this the right move for the future of the company? In a word … no.

Also call it Pro Plus

There was a clear theme among iPad and Mac editions … better specifications match higher prices. As a quick comparison, last year’s iPad Pro 1

0.5 “the price was $ 649, the similar 11 model for this year comes to $ 799. Although Apple improved Pro versions by moving to edge-to-edge screens, better components and USB-C charging, asking for a price increase of more than 23%, even for the usual Apple fans.

At even higher end of the spectrum, the larger 12.9-inch iPad Pro from 2017 was originally priced at 799 $ while the latest version starts at $ 999. The motivation for these significant price increases seems to be centered around the idea that iPad Pro is a laptop replacement. It’s a matter of convincing users to spend $ 799 to $ 999 on a tablet, but theoretically Apple puts headphones to head-to-head with something lighter.

Review some of Apple’s comments on Pro models, it’s clear that the tablet market is not a core focus. Apple says iPad Pro, “makes you Sheet nka what iPad can “and then in a very cozy way” and what a computer can. “Apple also connects Face ID to this theme, saying,” It’s the world’s most valuable email authentication in a tablet and computer. “Last but not least, Apple says about its A12X Bionic chip that” it’s faster than most laptops. “

Slower demand and higher prices are a real threat

The short version of Apple’s iPad Pro game is very simple: the tablet market is not enough for iPad anymore. As far back as 2014, Apple knew that the tablet had problems. At that time, the company reported that iPad sales were slowed and blamed the problem of “softness in some parts of the world.”

Fast-pacing until 2016 and tablet sales continued to fall. Moving this year, studies have confirmed that the long upgrade cycle is a problem which causes Apple and other tablet manufacturers to suffer. The IDC recently reported that the tablet market recorded the 15th straight quarter of decreased device sales.

Regarding the tablet’s replacement cycle, it stood at 5.28 at 2017. By 2018, the replacement cycle shifted to 5.12 years. According to the year’s studies, the byte cycle can fall to 4.78 years by 2022, but in relation to other units this is a very long lead time. If these numbers are correct, Apple will not be able to sell a replacement tablet to a user who bought an iPad two years ago, until 2021. This activity seems to have turned into a business cycle. Users are not really looking for a reason to replace the tablet until it dies or stops supporting the apps they want to use.

A new comment from IDC’s Jitesh Ubrani seemed to clarify the problem of tablets even longer. The comment was, “Those who work with faster budgets have had very few options available to them and thus some have chosen for traditional computers.” Microsoft (NASDAQ: MSFT) and Alphabet (NASDAQ: GOOG) (NASDAQ: GOOGL) try to handle this demand with Surface Go and Chrome devices, but Apple only made it more expensive to surely get the best tablet on the market. Demand for tablets is already very soft; raising prices is a dangerous move.

iPad is not like iPhone. The iPhone is stable about the slower demand and is supported by a constant push of carrier to get users to upgrade. Tablet sales have no such warranty or support. Investors should be worried that the company may only have priced based on the declining demand it has on the iPad.

Is Apple trying to kill the demand for one of its few bright spots in hardware?

There have been so many articles devoted to convincing users that we are in a “post-PC era”, it’s impossible to know where to start. But the latest headlines and studies suggest that the computer’s death has been overblown. By 2016, 156.8 million were sold worldwide. By 2017, this amount increased to more than 161 million, and by 2018 the amount should be earmarked 162 million. The same study indicates continued slow growth to about 165 million units before 2022.

Users begin to realize that there are certain devices that are simply better for certain tasks. A good example is that I’m writing this article. I could theoretically use an iPad or laptop for writing. But with two screens and multiple windows open, it’s only possible to use a desktop or laptop connected to a docking station for multiple monitors.

Users who want to watch videos or play games on a larger screen would probably benefit from a tablet over a smartphone or waiting for a laptop or desktop to boot. Productivity that is only possible on a desktop or laptop is a clear explanation of why companies and some consumers buy computers. According to IDC and Gartner, the PC industry grew by between 1% and just under 3% this year.

Similarly to Apple’s increased iPad Pro pricing, the company also dropped prices for its cheapest Mac options. MacBook Air, which used to be $ 999, was upgraded with a better screen and better specifications, but at a price of 20% higher. In an even more surprising move, the Mac Mini was moved from $ 499 up to $ 799. Although Mac Mini has received significantly better specifications, a 60% price increase took essentially Apple from the regular desktop market.

This becomes the core of Apple’s investor concerns. Mac business generated over $ 7 billion in sales last quarter, but it was ahead of the massive price increases. Apple devices have always been priced, but it is unclear if users will be willing to pay as much of a premium.


Desktop Announcement Price

Laptop Avg Price


$ 1,000

] $ 1,500


$ 550

$ 700

: Gizmodo)

With desktop prices 80% higher and laptop prices more than twice as much as for a regular Windows device, Mac users ask pony up even more than before. The economic principle of price elasticity indicates that consumers will pay more for a good or a service if the price increase is not so great that they start to question their purchase decision. Price increases of 20% or more are an apparent difference that consumers will notice.

18% of revenues are not peanuts

Bottom line, Apple seems to play with fire. The IPad Pro line and the updated Mac series give some confusion about what Apple is trying to sell its customers. Comparing MacBook Air to the iPad Pro models suggests that Apple’s pricing might be to kill a company when trying to grow the other.




Screen (Pixels)

Battery Life


MacBook Air 13 “

Intel 1.6 Ghz i5



12 hours

2.75 lbs

iPad Pro 11 “

19659022] A12X

64 GB

11″ (264 pixels)

10 hours [19659022] 1 kg

iPad Pro 12.9 “


64 GB

12.9″ pixels)

10 hours


(Source: MacBook Air – iPad Pro 11 “and 12.9”)

Looking at specifications, iPad Pro models seem to be of better value for many users. MacBook Air is $ 1,199, but an iPad Pro 11 “with Smart Keyboard Folio costs $ 978. The 12.9” with the keyboard would amount to up to $ 1,198. The fact that Apple went out of the way to claim, “iPad Pros is faster than 92% of all laptops,” complicates just further things.

The combination of iPad and Mac revenue was 18% of sales last quarter. While many will focus on iPhone sales or Services growth, two of their overlooked revenue streams, with significantly higher prices, risk something that investors need to pay attention to. The company can not afford mistakes, while it doubts its openness. The stock has been down since the last performance report, but it is an important step in the wrong direction.

Remarks: I am / we are tall AAPL.

I wrote this article myself, and it expresses my own opinions. I’m not eligible for compensation (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.


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