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Apple's Troubles Aside, iPad Keeps Making Enterprise Headway

Most of the focus surrounding Apple's earnings yesterday is on the dip in iPhone sales and Cupertino's whiff on financial analysts' expectations. It's got to be bracing to Tim Cook that his first two major public events as CEO -- the iPhone 4S launch and the quarterly earnings -- have come across as disappointments. At this point, though, it seems like a hiccup rather than a trend.

In any case, sales of the iPad, and company officials' comments about iPad in the earnings call, continue to validate the market for tablets as business -- not just personal -- devices.

First, the numbers. Apple sold 11.1 million iPads during the September quarter. That's a 166 percent increase from the 4.2 million sold in the year-ago quarter and a sequential gain of 20 percent over the 9.25 million iPads sold in the prior quarter.

The iPad business generated nearly $7 billion of revenue for Apple in the latest quarter, and CFO Peter Oppenheimer said business interest in the device is only increasing.

"It's been just 18 months since we introduced iPad and the pace at which businesses worldwide are adopting this technology is unprecedented," Oppenheimer said, according to a Seeking Alpha transcript of the earnings call. "Today, 92 percent of the Fortune 500 are testing or deploying iPad within their enterprises, up from 86 percent last year. Internationally, 52 percent of the Global 500 are testing or deploying iPad, up from 47 percent last quarter."

Oppenheimer's examples of enterprise iPad deployments included:

  • United Continental Holdings replacing heavy, paper-based flight bags with iPads in every cockpit.
  • All Nippon Airways using iPads in training programs for flight attendants.
  • Sonic Automotive using iPads for customer check-in at the service department and also to provide analytics to regional managers.
  • Internally developed apps for field sales teams at Aflac, Biogen and General Mills.
  • Siemens Energy technicians taking iPads on wind turbine maintenance jobs.

Apple's iPad results validate Microsoft's intense focus on getting tablets right with Windows 8. There's a business market for tablets, slates or whatever you want to call them. Given Apple's iPad growth and the PC market's slow growth, the pressure is on to get Windows 8 not just right, but right quick.

In the meantime, the opportunity for Microsoft partners to meet customers demands for tablet-based solutions will continue to force them toward the iPad, at least until Microsoft ships Windows 8.

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Posted by Scott Bekker on October 19, 2011 at 11:58 AM


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