Cook admits Apple has “cannibalised” the iPad

Apple CEO Tim Cook has admitted that Apple has damaged the sales of the iPad by releasing bigger screen versions of the iPhone. Despite announcing another record quarter of profits, the black spot on Apple’s balance sheet is unit sales of its tablets, which have fallen 23% year-on-year. 

iPad sales began to plateau in 2013 and then began to decline quite sharply in 2014, as Apple both increased the screen size of the regular iPhone and launched the over-sized iPhone 6 Plus. The 5.5in screen on the iPhone 6 Plus boasted a finer resolution than the original 7.9in iPad mini, and many reviewers found themselves using the smartphone for tasks that they would previously have picked up a tablet for.

Speaking to analysts at Apple’s earnings announcement, Cook sounded almost resigned to the iPad’s long-term fate. “We are clearly seeing cannibalisation from the iPhone and on the other side from the Mac,” Cook said. “We have never worried about that, it is what it is, and at some point it will straighten out.”

Increased iPhone sales have certainly compensated for the loss of tablet revenue. Unit sales of the iPhone were up 40% year-on-year, whilst revenue from smartphones was up 55%, suggesting Apple is selling plenty of the premium iPhone 6 Plus handsets. Apple doesn’t break down sales by individual model. Mac unit sales were also up by 10%, although revenue only increased by 2%. 

In total, Apple posted a profit of $13.6 billion, a record for the second quarter. The company is now sitting on a cash pile of $195 billion, enough to buy an asteroid that shaved past the Earth in 2013, although it might need to borrow a few bob to build the space ship to catch up with it.