6appleAfter the two digit revenue growth in the first quarter of 2013, Apple Inc. now reported in Q2 a revenue growth rate of less than 1%. In the past years, Apple was used to steadily rising growth rates, as the demand for the iPhone and iPad was high. Now it seems like the market for high end mobile devices is nearly saturated. So what‘s up with the iPhone and iPad?

Especially the tablet computer is not selling the way it used to. The reason is competitors like Samsung and Acer, the high price of the iPad and that there hasn‘t been a new revolutionary product launch in a while. Actually, the automotive industry is facing similar problems.

The iPad was the last innovative device Apple brought to market and that has been three years ago. Similar to the iPhone, the iPad made tablet computers popular and got the competition to work hard. But nothing spectacular has happened since then. The latest version of the iPad doesn‘t look much different than the first iPad, and all this makes it obvious why the iPad is not really selling anymore.

Surely some competitors would be happy to sell as many tablets as Apple still does, but compared to what the company is used to, such as 14.6 million iPads sold in 3 months compared to 17 million the year before, creates the disappointment. Revenue dropped by 14% compared to last year, and by even 25% compared to Q1 2013.

New Apple hardware is expected by fall and could be the reason why sales dropped to this extent. Or is the revolution simply over?

If you take a look at the market: It is Apple against all others. In the last years the competition has been working hard to keep up with Apple, led by Samsung. The operating system Android has gained tremendous power in the tablet and smartphone sectors. Prices of tablets seem to be going in one direction: downward. Good 10“-tablets, comparable to the iPad, are available at much lower prices, 7“-tablets are even cheaper and Acer is offering tablets for a simply unbeatable low price.

As the market is becoming increasingly saturated, consumer electronics companies are being forced to offer lower priced products in order to reach a broader target group. Rumor has it that Apple is working on an iPhone Light for the very reason, and it might just be that Apple will have to offer something similar for the tablet market.

By Anjum Siddiqi