iPad Product Line Revenue to Stabilize: KGI’s Ming-Chi Kuo

24 Oct

KGI Securities analyst Ming-Chi Kuo said in an Oct. 22 report that despite iPad shipments continuing to drop, Apple’s revenue from the product line should stabilize soon.

Kuo said the upcoming iPad Pro, with a price tag of US$799, will push up the average selling price of the product line. In this regard, Kuo believed that “the worst is over for iPad.”

Impacted by large-screen smartphones, iPad sales in recent years have been on the decline. However, as smartphone sizes eventually settle at between 4.7 and 6 inches, larger-size iPad distinctly stands out to meet consumers’ need for a tablet device.

The iPad Pro is scheduled for release next month. Due to the supply issues with Sharp’s display panels, Apple is expected to ship only 2 million units of iPad Pro in Q4 this year and increase the shipments in 2016. The average selling price is also expected to go up with the increasing supply.

Kuo forecast that the iPad will ship up to 15.5 million units this quarter. While he expects iPad shipments to drop 16 percent in 2016, the revenue is not expected to decline, due to the higher margins on the 12.9-inch iPad Pro.

Meanwhile, Kuo believes iPhone will continue its strong sales and that Q3 sales will be an increase of 23.6 percent from the same period last year, reaching 48.5 million units. Among which, the newly released iPhone 6S series will account for 22 million units. In Q4, Kuo forecast iPhone shipments to reach between 70 million and 75 million units. Kuo also warned that Apple may see its first year-on-year shipment decline in iPhone in 2016.

News souce: Leiphone