Every so often, someone in technology points out a trend so
unexpected, so startling, that for a time, no seems to know how
to respond. The market received just such a "say what?"
moment on Wednesday of last week when the CEO of Best Buy (
), Hubert Joly said, when speaking to the website
, "The tablets boomed and now are crashing. The volume has really
gone down in the last several months. I think the laptop has
something of a revival because it's becoming more versatile."
This came as a surprise to many analysts, who still consider
the tablet market
the place to be. It must be heartbreaking to Satya Nadella who
has thrown everything he has behind Microsoft's (
) push into the tablet market.
So how can we gauge the health of the tablet market? With
difficulty, since 30% of the market is made up of a large number
of competitors who's relative strength vs. each other varies
considerably from quarter to quarter. Fortunately, approximately
70% of the market is controlled by Apple (
). While we know it isn't a complete picture, let's look at how
Apple's iPad sales are going, based on the company's
. Here is the product summary section of the most recent, (Q3
Sure enough, Apple's most recent earnings report shows that
sales of iPads fell markedly between Q2 '14 and Q3 '14. But wait,
we don't measure the success of a technology company by looking
at quarter-after-quarter performance, we look at quarter vs.
year-ago quarter performance. Here are the numbers from Q3
'13, added to our image.
Now we can see that Apple's iPad unit sales in Q3 '14
decreased by 9.2% from the year-ago quarter, and that the
company's revenue from iPad sales decreased by only 7.7%. That's
a slowdown, to be sure, but it's not much of a crash. Put another
way, the decrease in volume noted by Joly was, in fact, an
expected seasonal decrease. So why would he call that a crash?
There is no reason why he would, unless of course, the sales he
was seeing at his own store were decreasing at a greater rate
than those in the rest of the market.
Conclusion: It isn't tablets that are crashing; it's Best Buy.
The winner is Apple, the loser is Best Buy. Easy as pie, and all
right there in the published numbers. As for Microsoft, Samsung
and Google (
), a collapse of the tablet market would be bad news, if, in
fact, it were really happening, but for the present, at least,
there is no reason to think that it is.
has been a business writer since the first day of the
twenty-first century, having written for PRA
International and the United Nations Department of
Peacekeeping. He graduated from Davidson College in 1993
and received a Master of Arts in Teaching from Mary
Baldwin College in 2011. He became a stockbroker in 1993,
but now works for Fresh Brewed Media and uses his powers
only for good. You can see closing trades for all
Julian's long and short positions and track his long term
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