This month and most likely this week you can start ordering iPadPro, the newest and biggest tablet from Apple that is competing to be a laptop replacement. This is the holidays season and Apple had always sold significant number of iPads during this period. The results will be reported in its fiscal Q1 2016, which isn’t until end of January 2016. And even then we will only know the aggregate number of iPads, not the break down of models.
Why wait till January, let us model iPad numbers now. We will do this in two parts
- Predict the total iPad unit sales
- Predict the mix of iPad Pro
Here is the chart of per quarter sales of iPad since its introduction in 2010.
As of end of September 2015, Apple had sold a total of 292 million iPad, a combination of all models (iPad, new iPad, iPad Air, Mini ). Take a closer look the quarter by quarter sales. Apple reports its biggest numbers during Q1 that coincides with Holidays. Overall, year over year same quarter sales are declining.
In 2013 the Q1 sales were 22.8 million, in 2014 it went up to 26 million, but down to 21.4 million in 2015. To predict Q1 2016 numbers let us use one more data point – sales as a percentage of past total sales. To add better precision, let us use total sales up to 4 quarters prior to current one and plot the graph.
The downward trend is expected as the install base is growing with each quarter. But the trend line here gives us better precision of sales for Q1 2015. The Q1 numbers are 57.4%, 26.5% and 12.7%. The upcoming quarter is no different and will see near halving of same quarter the prior year. That points to 6.3% of sales from inception to Q4-2014 or 18.97 million units.
Since iPadPro is positioned as laptop replacement it is bound to steal some share from MacBook Air and bring in some new customers. But not much given all Mac models sell just 6 million units a quarter. A close approximation is adding another 5% to 18.97 million for a total of 19.1 million iPad, Mini and Pro.
Now to computing iPad Pro units in this 19.1 million.
Before iPad mini was introduced in November of 2012, Apple had four iPad models – iPad, iPad2, iPad 3rd gen (New iPad) and iPad 4th gen. It has sold a total of 98.1 million iPad units till the prior quarter (Q4-2012).
What is the mix of iPad vs. iPad mini since then? Thanks to analysis from Localytics we have data on the mix of models in the install base.
According to this data, as of October 2015 (close to end of fiscal Q4 2015) iPad mini models account for 28.3% of the install base of 292 million units. If we considered the numbers post Mini, the mix is 57.4% iPad and 42.6% iPad mini.
As this is aggregated over several quarters, the percentages represent the steady state mix for Mini vs. iPad. We can use these numbers as proxy for future quarters. That is, had there been no iPadPro the upcoming quarter will see 57.4% and 42.6% mix for iPad and Mini.
It is safe to say those who prefer the Mini are not the most likely ones to switch to or buy the larger sized iPadPro. With the assumption that utmost 1 out of every 10 who picks iPad will switch to iPadPro, here is the final prediction for Q1-2015 iPad sales and model mix.
So Apple will sell about 2 million iPad Pro and the total unit sales is going to be less than 20 million.