Tim Cook says iPad sales will remain gloomy for next couple of quarters

Apple CEO Tim Cook says he doesn’t expect that the timid iPad sales seen in the last couple of quarters are likely to improve much during the next two. Cook made his comments during the question-and-answer session of Apple’s earnings call today.

Apple reported record profits of $18 billion during the quarter, but the strong results were driven by iPhone sales, not iPad sales. iPad sales declined 21 percent from the year-ago quarter to 21.4 million units.

In the previous quarter (which ended in September 2014), iPad sales were well down at 12.3 million, compared to sales of 14.1 million a year earlier. And Cook made a similar speech to the one today on that conference call.

Cook pointed to a couple of factors that might be affecting iPad sales; Mac sales on one side and phone sales on the other may have “cannibalized” tablet results. Indeed, both those categories showed strong sales relative to the iPad during the last quarter.

Also, Cook says, the upgrade cycle is longer for iPads than for other devices, like smartphones. People hang on to iPads longer, so sales are slower.

“When you measure results in these 90-day clips, in the short run you won’t see a dramatic improvement year-over-year in the next quarter,” Cook said, later adding that “I’m not projecting something very different in the next quarter or the next quarter.”

But Cook says there’s reason for hope and that he believes the iPad is still a very good business.

“I see that the first-time buyer rate is still very high,” Cook said. More than 50 percent of iPad sales in the U.S., Japan, and the U.K. are by people who’ve never owned an iPad. This suggests that there’s still a huge addressable market for the device. The first-time buyer percentage goes up past 70 percent in developing markets like China,” Cook said.

Customer satisfaction ratings for the device remain up toward the 100th percentile among tablets, Cook says. He’s further encouraged by research showing that people spend about six times as much time on their iPads as owners of other tablets spend on their devices.

Other research says that about 80 percent of all tablet-based ecommerce transactions happen on iPads.

“So over the long arch of time, the iPad is a great business,” Cook said.