Wednesday, July 23 07:58:25
Apple Inc's iPad is losing steam just four years after its release, but an alliance with International Business Machines Corp could rejuvenate a flagging product by entering into a largely untapped corporate market.
Apple shipped 13.2 million iPads in the June quarter, 8 percent fewer than a year earlier and lagging Wall Street's forecast for 14 million or more. Sales of the device, which accounted for 15 percent of revenue, fell short of Wall Street's expectations for the second quarter in a row.
Apple helped create the tablet market in 2010 with its first iPad. But growth has plummeted from 2012, as larger phones became more popular and people delayed replacing their tablets. And it is ceding market to mostly cheaper Android offerings from Samsung Electronics Co Ltd and Chinese manufacturers using Google Inc software.
Another threat to iPad sales may come from within. Apple is expected to introduce a larger 5.5-inch (14.0-cm) iPhone in the fall. At those dimensions, the iPhone would begin closing in on the 7.8-inch (19.8-cm) iPad mini.
"You have the negative impact of the larger screen iPhone and what that would do to iPad mini," said Piper Jaffray analyst Gene Munster. "You're going to get a larger screen iPhone before you'll get contributions from the IBM partnership."
Investors hope the partnership with IBM announced this month will help bolster sales in the largest global enterprises, which could provide a boon to U.S. tablet sales.
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