Who's buying Apple's iPads?

The new iPad Pro has a powerful M4 chip, but it's unclear who's buying iPads and whether the latest models can reverse a downward sales trend.

• Apple's new iPad lineup debuted on May 7 with flashy new features.
• The new iPad Pro has a powerful M4 chip, but it's unclear who's buying iPads these days.
• Both analysts and owners suggest that the upgrade cycle might be to blame.

Apple launched its latest iPads earlier this month with great fanfare and a host of new bells and whistles.

While it's clearly a move to update the product line and invigorate customers, it's also led many to ask: Who's actually buying new ones?

The tablet computer debuted in 2010 with a price tag of $500, and the lineup has since expanded to include tablets that fit the needs of kids, creatives, and business professionals. Its most recent versions include the thinnest yet, with an impressive OLED screen — if you want to spend $3,000 on a new iPad, that is.

But the overall iPad line "has been in a funk for three years," said Gene Munster, managing partner at Deepwater Asset Management. Apple's most recent earnings showed quarterly revenue of $5.56 billion — down 17% year-over-year and below analysts' estimates.

One major issue, analysts who spoke to Business Insider said, is how regularly owners feel the need to buy a new one.

"They use their iPad, but they don't use it enough that they need to upgrade super often," Munster said.

In fact, Wedbush Securities managing director Dan Ives estimated that 70% of iPad owners haven't upgraded in 4 years — seemingly a lot longer than people keep their iPhones.

One Reddit user recently asked in the r/iPadPro subreddit if 2018 iPad Pro owners were finally ready to upgrade to the latest model, and the responses were mixed.

"My beloved 2018 died last month. I drove that poor iPad into the ground and she held strong. I already ordered the 2024 and plan to keep it for at least another 6 years," one user wrote.

Others weren't so quick to give up on their old iPads, which are still running and can still support current software.

"I'm waiting for some useful 3D model editing app or something that needs something more powerful to make me push my 2018 past its breaking point but haven't gotten there yet," another user replied.

Better computing power could be something that drives sales. Ives said the new M4 chip in the new iPad Pro, which Apple touted as an "outrageously powerful chip for AI," could lead more consumers to buy an iPad over a Mac.

It's key as AI becomes increasingly ubiquitous. Apple CEO Tim Cook has said there are "big opportunities across our products" for generative AI, so the newest iPad should reasonably be compatible with any updates the company could announce at its Worldwide Developers Conference.

Meanwhile, Munster believes education is still the tablet's strongest market. Remote learning prompted by the COVID-19 pandemic grew iPad sales in 2021, and Apple offers deals on devices for students.

Apple execs are optimistic about the tablet, at least in the short term. CFO Luca Maestri said on May 2's earnings call that the company expects iPad revenue growth in the double digits in the current quarter.

But it'll need to bounce back sustainably if Apple hopes to wow analysts.

"This has been a long, slow, downward trend for the iPad," Munster told BI.