• Monday, May 20, 2024
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BusinessDay

Apple aims to win back fans with redesigned iPad and new Watch

Ben Brooks has two Apple screens on his desk, but neither of them are plugged into the nearby Mac computer, which has been gathering dust for so long he cannot remember when he bought it.

As chief executive of MartianCraft, he manages the software development consultancy and its 37 staff entirely from a pair of iPads.

“I do all of my work from it,” he said. “I always think it’s funny when people are dumbfounded by that.”

Mr Brooks, who writes a blog that has evangelised working on an iPad, relies on a combination of email, Slack for messaging, Excel and Word, and the web browser.

Any business manager could do the same, he said. “I have a hard time wrapping my head around people who say they can’t do it, when I know the kind of work that they are doing.”

But despite Apple’s efforts to sell the iPad as a tool for professionals, Mr Brooks remains in a minority, even among Apple aficionados.

Though sales of Apple’s once-pioneering tablet have started to show signs of recovery in the past few quarters, to 11.5m in the third quarter of this year, they remain far from the 26m peak of the first quarter in 2014.

Next week, at its annual iPhone launch event, many analysts believe Apple will try to revive the iPad, offering a radical redesign that will remove the device’s home button and add facial recognition technology similar to that of the iPhone X.

But even as the company tries to find more users for its tablet, another product in its stable, the Apple Watch, is poised to overtake it in unit sales within the next year. A new Watch is also anticipated at next week’s event.

While Tim Cook, Apple’s chief executive, claimed in 2016 that the iPad Pro was “the perfect expression of the future of computing”, it is becoming increasingly clear that the next era of personal technology will be dominated by much smaller screens, worn on the wrist — or even the head.
iPad was an initial hit

The iPad and Apple Watch had very different beginnings.

The iPad, whose development predated even the iPhone, was an instant hit when Steve Jobs launched it in 2010. The iPad would create a “third category of device”, Jobs promised, “more intimate than a laptop and so much more capable than a smartphone”.

Others in the industry were sceptical at first. “You might want to tell me the difference between a large phone and a tablet,” Google’s Eric Schmidt said at a Davos event soon after the launch.

Initially it was Mr Jobs who seemed to be proven right. Sales of the iPad skyrocketed. Pundits predicted it would revolutionise media industries, from books and newspapers to video and games, at a time when the App Store seemed to mint new millionaires overnight.

“We believed that we could bet the entire company on this tablet idea,” recalled Mike McCue, chief executive of Flipboard, the magazine-style newsreader app that was one of the iPad’s first big hits. “It was incredibly exciting.”
Wearables quarterly growth hits 60%

The Apple Watch, by contrast, had a less auspicious start.

It was unveiled alongside the iPhone 6 — arguably Apple’s most successful recent smartphone — in September 2014. Even Apple seemed unsure whether it was a fitness tracker, a Dick Tracy-style communicator, or a luxury fashion accessory.

Initial reviews of the Watch were mixed, calling it unintuitive. Sales appeared to be underwhelming, a suspicion only fuelled by Apple’s refusal to report any figures. App developers lost interest.

Work on the Apple Watch began only after Jobs died, making it an easy target for critics who argued the company had lost direction without its founder.

But Apple remained committed to the Watch, boosting its performance with faster chips, lowering the price of older models to make it more affordable and undoing some of the original user-interface misfires.

Neither the iPad nor the Watch has succeeded in taking investors’ primary focus away from the iPhone, which still accounts for almost two-thirds of Apple’s revenues. But as the value of iPad sales declined from $11.5bn in 2014 to $3.9bn in early 2017, the Watch slowly started to steal its mojo.

This July, Apple revealed that its wearables business— which includes its Beats and AirPods headphones as well as the Watch — had seen 60 per cent growth in the most recent quarter, bringing its total sales for the previous 12 months to more than $10bn. “This is a product category that essentially didn’t exist three years ago,” said Luca Maestri, Apple’s finance chief.

At the same time, after an education-focused event in March that saw Apple upgrade its entry-level iPad, the tablet could muster only 1 per cent year-on-year unit growth, with revenues still in decline.
Struggle to define iPad’s purpose

Analysts say that Apple has struggled to give the iPad a clear purpose, especially as smartphones have become ever more central to customers’ lives.

Rather than creating a third category, consumers are left wondering whether it can substitute for one of their other devices.

“People are still not thinking about the iPad as a computer, they are thinking about it as a big iPhone,” said Carolina Milanesi, analyst at Creative Strategies. “I don’t know that even Apple knew exactly how to market the iPad at the beginning, other than being more powerful and bigger than the iPhone, so you can do more.”

iPad buyers, meanwhile, tend to hang on to them for several years, in part because there has not been a steady stream of new apps that require extra computing power to work well.

Some of the tools that app makers rely on to develop software for Apple devices, such as Xcode, are still not available for the iPad.

“Since I work with iOS developers, I get a bunch of grief because I’m always talking about how great the iPad is . . . while they are completely unable to use it to do their full-time job,” said Mr Brooks.

Since Flipboard’s launch in 2010, the newsreader service has diversified to run on smartphones and the web. But Mr McCue said the company remained “totally committed” to the iPad, which he believes has a “very bright” future.

“I think that increasingly people will use laptops less and iPads more. It’s already happening in the younger generation,” he said. “The iPad represents the future of computing, not of the mobile phone.”
Future belongs to the Watch

While Ms Milanesi predicts the iPad could see its biggest upgrade cycle in years with the forthcoming improvements, the Watch is now more important to Apple’s long-term future.

“The market, I think, is bigger for the Watch than for the iPad,” she said.

Jonathan Ive, Apple’s design chief, seems to agree, given his personal investment in the product.

Apple Watch was an “obvious continuation of this path that we’ve been on for so many years to make technology more personal and more accessible”, he told watch magazine Hodinkee in an interview earlier this year, calling it “the distillation of craft, ingenuity, miniaturisation and of the art of making”.

The lessons learnt in miniaturisation and making technology more intimate have already paid off in the huge success of Apple’s AirPods, and will be even more valuable as it continues its secretive development of smart glasses.

“The opportunity is phenomenal,” Sir Jonathan said of the Watch. “Particularly when [you] don’t understand just where we are today in terms of technology and capability, but where we are headed.”