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Trillion

by M.G. Siegler

 

The iPad vs. Mac Juxtaposition

www.aboveavalon.com

Neil Cybart:

While Apple management never publicly showed disdain for Mac, the level of attention given to the iPad in the early 2010s likely corresponded with a declining amount of time and focus dedicated to Mac. Some of the Mac decisions made around this time, like the Mac Pro's design, later came back to haunt Apple.
The iPad vs. Mac relationship started to change after iPad sales peaked at the end of 2013. Management's efforts to entice iPad users to upgrade proved futile as iPad sales declined from a 75M units per year run rate to a 40M units per year sales pace. While iPad sales were in free fall, the Mac remained a steady ship, not moving far from its 20M unit sales per year pace. The Mac demonstrated a level of sales consistency that management may not have expected given iPad's popularity.
Apple now finds itself with an iPad business that is twice the size of Mac in terms of unit sales, but smaller than the Mac when it comes to revenue. The iPad user base is nearly three time as large as the Mac user base and is growing by 20 million new users per year while the Mac user base is seeing more like 10 million new users per year. In a nutshell, both the iPad and Mac businesses have found stability and continue to connect with their respective user bases.

I think that's an interesting and good way to frame this "debate". It seems perfectly logical (and perhaps even reasonable) that Apple took its eye off the Mac prize when the iPad exploded as it did out of the gate. They may have had not only a "holy shit, this thing is going to be much bigger than the Mac!" moment, but a "holy shit, can this thing be bigger than the iPhone?!" moment. But that explosive start, while great in many ways, as we know now, was misleading.

The iPad remains a fantastic business. But it often gets knocked these days because of said explosion out of the gate before falling back to a (still massive) equilibrium. And in a weird way, Apple created a product that was "too good" -- at least from a business perspective. You simply don't need to upgrade the iPad each and every year.

It's clear now that Apple made a mistake in neglecting the Mac, and in particular the "Pro" segment of the market. But that chart above, and Cybart's framing makes it clear why -- and why they won't make that mistake again going forward.

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