Apple iPad Air, Mini sales plunge but Tim Cook still believes tablets will surpass PC market

Apple iPad in use

Analysts ask what Apple, Inc. intends to do now that sales of its groundbreaking product show signs of a continuing downward spiral.

Apple last week confirmed it sold 16 percent fewer iPads in the March quarter year-on-year, verifying many analysts' expectations that its tablet sales have slowed—perhaps irretrievably.

Apple did much worse than analysts expected. It sold 16.4 million iPads in the quarter, a drop of three million units on-year. Some analysts believe the spectacular early rise of the iPad is to blame for its current sales slump.

"I think that's key to understanding (what's happening now)," said Carolina Milanesi, chief of research at Kantar Worldpanel ComTech. "The uptake was really, really sharp. Everyone thought it was going to take much longer."

She believes the iPad's initial growth strengthened by Apple's first-mover advantage was clearly unsustainable.

Apple CEO Tim , however, tried to downplay the downturn, claiming iPad sales came in at the high end of Apple's expectations.

"In the March quarter last year, we significantly increased iPad channel inventory, while this year we significantly reduced it," Cook said.

"We ended the December quarter last year with a substantial backlog with iPad Mini that was subsequently shipped in the March quarter, whereas we ended the December quarter this year near supply-demand balance."

If those in-pipeline iPads were discounted, the decline for 2014's March quarter was only three percent, Cook argued.

Despite data apparently slowing the decline of the iPad, Cook remains bullish on the device. "We continue to believe that the tablet market will surpass the PC market in size within the next few years, and we believe that Apple will be a major beneficiary of this trend," he said.

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