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Why the fate of iPad should not mean much to Apple Investors – The Motley Fool

Later this month, Apple (NASDAQ: AAPL) is expected to present updated versions of its iPad Pro tablets. The device is…

Later this month, Apple (NASDAQ: AAPL) is expected to present updated versions of its iPad Pro tablets. The device is expected to be radically redesigned compared to its predecessors, dramatically smaller features, sports screens with the elimination of the Touch ID (and home button) in favor of the company’s face recognition technology, called Face ID, which first made its debut last year’s iPhone X.

The device comes sure to get a lot of pressure. Frankly, they will probably be good products that could give the company’s iPad company a step in the coming quarters. But before you get for excited about these new iPads and the effect they may have on the business, it’s good to understand how the insignificant iPad product category is for Apple

Image Source: Apple.

Small and smaller

Apple’s iPad business occurred during the company’s fiscal year 2013, with unit shipments totaling 71 million, and sales are in spot spot of $ 32 billion. That year, the iPad accounted for approximately 18.7% of the company’s annual revenues.

Over the years, Apple’s iPad business took a series of unit transports and revenues fell. When Apple turned into its 2017 fiscal year, it reported that it sold almost 43.8 million iPads and generated $ 19.2 billion in revenue under the road. Apple’s iPad business accounted for almost 8.4% of the company’s revenue during that year.

While Apple does not report its full fiscal year 2018 results until November 1, iPad operations became even less important during the first three quarters of the year. Although Apple reported a 2% increase in iPad revenue during that time, Apple’s total revenue grew with a more robust 15% interest rate thanks to the iPhone store delivering 15% revenue growth, services dedicated to 27% growth and sales of “Other iPad”, including Apple Watch, AirPods, HomePod and so on) by 37%.

iPad accounted for almost 7.3% of the company’s revenue in the first three quarters of the 2018 fiscal year, down from the more than 8.1% that it accounted for in the first three quarters of the company’s fiscal year 2017.

As a consolation prize, iPad did not slow the growth of Apple’s business during that time-the glory of the company’s Mac business, which saw revenue decline 3% in the first three quarters of the fiscal year 2018. (As said, Apple’s Mac business still reported more absolute revenue than The iPad business did.)

Should investors care?

It should go without saying that Apple is better at its almost $ 20 billion in annual iPad revenue than not having it. IPad is also an important part of Apple’s overall computer ecosystem. Therefore, investors should expect Apple to continue investing in building new iPad hardware, growing the iPad app’s ecosystem, and working to increase the adoption of iPad across industries.

If Apple can keep iPad business at least flat, it would not slow down the revenue growth that other companies deliver. And if Apple can actually put this business on a growth track – even if growth is modest – it would be even better.

Overall, I just do not think how iPad business is, or should be at the forefront of investors’ minds – and it should not affect anyone’s long-term prospects for the company.

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