It is no secret that Apple (NASDAQ:AAPL) is showing some softness in its iPad business line. While it is still generating a profit, it is not growing as much as before. In fact, it has become increasingly evident that the tablet market is fast becoming a race to the bottom. That’s right. The focus is on the content or cloud experience. The focus isn’t on the device that we use to access that content.
With that said, it is worth noting that Apple is between a rock and a hard place in regards to how aggressive it wants to be in the tablet space. It is worth noting that in the period between January 2014 and January 2015, the volume of sales for full-sized tablets decreased. This is in keeping with the decline in certain segments of that market. It appears that based on the performance of the smartphones, full-sized tablets might continue to suffer decreasing sales.
Where is this all leading to? On one hand, you have smartphone consumers who prefer larger and larger screens. This is the phablet revolution. On the other hand, you have tablet consumers who, from all appearances, want smaller screens. The answer is obvious. The answer is that the market is gravitating towards a phablet solution.
This is bad news for Apple. Why? It already has the iPhone. If the iPhone grows to a certain size, there is really no market left for the iPad. I hope you see the collision course here. There is really not much difference in functionality between a tablet and a smartphone.
If Apple’s tablet line crashes or suffers the same fate as the iPod line, this may put a lot of downward pressure on Apple’s stock. Apple can’t live on the iPhone alone. It just can’t sustain its stratospheric market valuation based on one product line.