Apple Wants Customers to See iPad Pro as Laptop Replacement. But Customers Say No.

We have been repeatedly told, by Apple of course, all we need is an iPad Pro with its keyboard and $150 Pencil. The perfect laptop replacement. Are the customers seeing it the same way?

One way to find this is by looking at the change in iPad Average Selling Price (ASP) due to iPad Pro. Since the regular iPad starts at a list price of $329, less than half of starting list price of $799 for $iPad Pro, you would expect an upward shift in ASP if there is higher percentage of iPad Pro in the sales.

Here is the chart on the history of iPad unit sales and ASP since its inception in 2010.

 

First fiscal quarter 2016 was the first full quarter iPad Pro was on sale since its introduction in September 2015. Back then, before Apple announced its results I predicted they would sell 20 million units for that Holidays quarter with 2 million of them pricey iPad Pro. I was overly optimistic in that prediction.

Apple sold a total of 16.1 million iPads. The ASP was $452 compared to $415 in the quarter it did not have pricey iPad Pro.  Since that initial jump of 10%, iPad ASP has stayed steady over the next six quarters. If we were to see increasing mix of iPAd Pro we should see an increasing ASP trend. We don’t.  There is increase in unit sales but not commensurate increase in revenue. For instance in the most recent quarter, iPad sales increased 15% but the revenue increased only 2%.  Macs on the other hand produced 7% incease in revenue with just 1% increase in unit sales.

Which means, try as it may, customers are not buying the pricey iPad Pro and not seeing it as laptop replacement. iPad ASP at this point may have hit the ceiling for Apple.