2014 wasn’t a great year for the iPad.
Apple’s iPad business has been in decline, with the company missing analyst estimates for iPad sales in the last quarter of last year during the holiday season. Apple sold 21 million iPads in Q4 2014, which is down from the 26 million is sold in the last quarter for 2013.
And expectations for 2015 aren’t too positive either — KGI Securities Ming-Chi Kuo predicted in February that iPad shipments will drop by 52.7% quarter-over-quarter in the Q1 2015.
This chart from Business Insider Intelligence from January gives you a good idea of how iPad sales went for Apple last year:
Why is the iPad in decline? One thought is that people simply don’t need to use tablets as much now that phones are getting bigger.
While that may be true, analysts at Jeffries think the iPad is in the midst of a change that could make it relevant again. They believe the iPad has potential to succeed in the enterprise market, although the competition from Microsoft and Android manufacturers like Samsung is getting more intense.
Here’s what the analysts and Jeffries wrote in their most recent note (emphasis is our own): “We think a combination of IBM MobileFirst for iOS, iOS extensions, and availability of Microsoft Office for iOS are increasing the relevance of iPad for broader Enterprise applications
The theory that the iPad will become more of an enterprise device than a consumer gadget isn’t necessarily new. Tim Cook even said on Apple’s last earnings call that “the real opportunity is to bring mobility into the enterprises and change how people work.”
But Jeffries already has some specific ideas about exactly how and why the iPad could succeed in workplace environments. In addition to Apple’s partnership with IBM, the firm also believes the iPad could become useful in the healthcare industry since it works with the Apple Watch, which is capable of gathering tons of health-related data.
The new support for extensions in iOS, which was introduced in June with iOS 8, is also really critical for the iPad, according to Jeffries.
Extensions let apps communicate with one another, which essentially means you can sort of mix and match features of different apps. For instance, you’d be able to edit photos from your camera roll with some of the editing features from another app on your phone, or use an app like Bing Translate in Safari.
It’s important to consider, though, that devices like Microsoft’s new Surface 3, which comes with the full version of Windows rather than Windows RT, and Samsung’s new Knox Security software, make the competition more fierce for Apple.
One of the biggest reasons Android hadn’t taken off in the enterprise in the past was because it wasn’t as secure as iOS or Windows, but Jeffries believes Samsung’s Knox software has changed that. The Surface 3 is also more of a threat that Microsoft’s previous Surface tablets because it’s much cheaper than the Pro model, but you still get the full version of Windows.
The latest note from Jeffries also adds more fuel to reports and rumours that Apple’s next iPad will come with a larger screen and a stylus, making it better-suited for productivity use cases. We’ll know more about Apple’s future plans for the iPad at the end of 2015 around October, which is when Apple traditionally unveils its new iPads.
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